The Bank of Japan this week broke from its negative interest rate policy, raising borrowing rates for the first time in 17 years now that inflation and wages are on the rise and Tokyo stocks are on the march.
The central bank's decision could usher in a new era for Japan, which has suffered through a prolonged period of economic stagnation and deflation. Yet BOJ Gov. Kazuo Ueda remains unreadable, giving no timeline for future policy tweaks in either direction. So what lies ahead? Here's a selection of stories to help you make that judgment.
BOJ ends negative rates, leaves questions over policy direction
On Tuesday, the BOJ scrapped its negative interest rate policy, guiding overnight lending rates to 0%-0.1%, up a tiny fraction from minus 0.1% to 0%. The central bank also ended its yield curve control policy that guides the yields of 10-year Japanese government bonds to around 0%, marking a historic shift from its massive monetary easing program. Read more.
Japan's wage hikes create game-changing inflation dynamic as BOJ meets
Economists predict that record pay raises recently promised by big Japanese companies will be a "game changer" for the nation. The fattened paychecks will come after three decades of low inflation and nominal wage growth. Read more.
What's next for the BOJ after its exit from negative rates?
The BOJ's decision heralds the start of a shift from an era of unprecedented monetary easing. What will be the impact on the Japanese yen and what are the remaining risks? Here are four things to know.
BOJ's next rate hike in spotlight as investors eye July or October
Following the end of Japan's negative rate policy, the market's attention has now turned to whether the bank will implement more rate hikes before the end of the year. An October hike is considered one of the most likely scenarios while a growing number see a July rate boost as another possibility. Read more.
Japan's inflation rose for the 1st time in 4 months in February
Japan's inflation rate rose for the first time in four months in February. The core consumer price index, which excludes fresh food, increased 2.8% from a year earlier, up from 2% in January. Japan's core inflation has been at or above the BOJ's 2% target for 23 straight months now. Read more.
Japan's Nikkei average closes at all-time high after BOJ policy shift
Japan's benchmark Nikkei Stock Average closed at an all-time high this week. Dovish remarks by the U.S. Federal Reserve and comments from BOJ Gov. Ueda that Japan's monetary policy would remain broadly accommodative helped fuel another bullish day for Japanese stocks. Read more.
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