Markets finished in positive territory for the week after the Bank of Japan today surprisingly introduced a negative interest rate. The benchmark rate of -0.1% means that “commercial banks” in Japan will be charged by the central bank for some deposits as the Bank of Japan starts charging them for looking after their cash. The negative interest rate is designed to encourage the banks to use their reserves to lend to businesses in an attempt to re-energize Japan’s economy which has been in a ten year drought. The charge does not directly apply to ordinary customers’ accounts yet, as was the case in Greece last summer. Japan has been desperate to boost consumer spending for years. At one point it even issued shopping vouchers to stimulate demand. Some analysts doubt just how effective the negative rate cut will be. The Euro-zone went to negative interest rates in June of 2014, but this is a first for Japan: the world’s 3rd-largest economy.
See more world coverage of the Bank of Japan deciding to implement negative interest rates below.
See why 2016 keeps getting uglier for US economy,according to CNBC below.
Here are the final numbers from Friday, 1/29/16 on Wall Street.
Dow Jones Industrial Average: 16,466.30 (+396.66 / +2.47%)
NASDAQ: 4,613.95 (+107.28 / +2.38%)
S&P 500: 1,940.24 (+46.88 / +2.48%)