Source: Bloomberg
Toru fujiooka
The outside world is generally expected that the Bank of Japan will cancel the last negative interest rate policy in the world in the next few weeks, which marks that a magnificent test of the global central bank's unconventional policy is about to end.
Economist and bond traders said that the President of Japan ’s President Temoda and Men will increase the short -term interest rates next week or April, which will be the first interest rate hike in Japan since 2007.
This move will marked a step towards the mainstream policy of the Bank of Japan.After decades of experiments, the Bank of Japan has accumulated a large number of bonds and stocks, and the scale of the balance sheet expands to 127%of the annual output value.Although all these quantitative easing and negative interest rate policies weaken the yen and prevent deeper shrinkage, the inflation rate has risen to more than 2%and maintains this level until the crown disease epidemic and the Russian and Ukraine War have caused the impact of supply.
For the world, this will represent the end of the era of negative interest rates.Negative interest rates are a radical policy. In the 2010, the European Central Bank and some central European central banks also adopted this method when they responded to falling prices.Just when many people in Europe question whether the negative interest rate is worth it in the face of pressure to the bank and the fixed income market, economists also have different views on Japan's negative interest rate policies.
"Negative interest rates have no effect on inducing inflation," the former Japanese central bank's supervisor's monetary policy was called a husband."Japan's inflation is pushed by price pressure from overseas."
Since Denmark, Switzerland, Sweden, and the euro zone have implemented negative interest rates from different motivations. The motivation has stimulated prices to increase prices from preventing large amounts of funds from flowing into Swiss franc to the European Central Bank after the sovereign debt crisis.
After more than ten years of shrinkage, the Bank of Japan began to implement negative interest rates in 2016, and before that, the president Kuroda Dongyan also publicly denied this.
"This is very influential," Hiroshi Yoshikawa, a honorary professor of economics at the University of Tokyo, said, "People were shocked and realized how bad the Japanese economy was at the time."
Kuroda Dongyan said at the time that if necessary negative interest rates may be further declined.However, under the strong opposition of the public and profit margins, and the pension and insurance management companies, the interest rate has never fell deeper.Six months after the unfavorable start, the Bank of Japan announced a policy assessment, with a view to maintaining a method of controlling bond yield while maintaining the unchanged negative interest rate.
The global negative interest rate experiment is also continuing.According to the Bloomberg Global Comprehensive Index, the market value of negative yield bonds finally reached its peak at the end of 2020 to $ 18.4 trillion.Then, inflation began to be active, the European Central Bank got rid of the negative interest rate, and the Swiss central bank also took action in September 2022. Therefore, the Bank of Japan became the last only the last only the only central bank to implement negative interest rates.
The evaluation of this policy is mixed.
The European Central Bank claims that negative interest rates are successful. Studies have found that negative interest rates support bank loans, improve the transmission of policy impulse to the financial system, stimulate the economy and increase inflation.
In Switzerland, the central bank governor Thomas Jordan has been further, indicating that the negative interest rate policy has proven its value, and it will be re -implemented if it is necessary.In contrast, the Swedish central bank withdrew from the policy at the end of 2019, arguing that the impact on its financial system was too great.
