Japan introduces negative interest rates
2016-01-29
On 1/29, the Bank of Japan decided to introduce quantitative and qualitative monetary easing combined with negative interest rates.
Shows the policy decision date, which differs from the date deposit treatment began.
Conditions at the time
Falling oil prices and international financial-market fluctuations were judged to risk delaying improvement in Japan’s inflation expectations.
How events unfolded
On 1/29, the Bank of Japan decided to introduce quantitative and qualitative monetary easing combined with negative interest rates.
Stakeholders and impacts
The Bank of Japan, banks, government-bond investors and borrowers assessed changes in the yield curve and intermediation.
Information available at the time
A tiered system was proposed, applying -0.1% to part of banks’ current-account deposits at the central bank.
Findings confirmed later
The Bank of Japan explained that applying the rate to the entire balance could increase burdens on banks and adverse effects on intermediation.
Alternative interpretations and limitations
Negative rates were not imposed on all deposits. Distinguish the announcement date from the actual implementation date.
Source-based context and interpretation
The BOJ's subsequent assessment described lower lending and corporate-bond rates after negative rates and bond purchases. Further transmission depended on bank profitability and lending behavior; excessive flattening could burden pension and insurance returns. Members differed on some causes. ASSETCASTING interpretation: Borrower savings and intermediary pressure can coexist. Negative reserve remuneration is not an identical loss for every depositor; examine banks' pricing and credit supply. Lower yields alone do not establish durable achievement of the inflation objective.
Evidence coverage through 2016-09-21 · Sources checked 2026-10-14
Related events and periods1
- Financial-crisis response and unconventional monetary policy
An event or period whose recorded start falls within this editorial interval. This does not establish that it caused or represents the characteristics of the era, nor guarantee that the entire period falls within the interval.
Historical events do not guarantee future recurrence or investment performance.