Central bank becomes world’s last to unwind ultra-loose monetary policy after signs of lasting end to decades of deflation
The Bank of Japan has ended an era of negative interest rates, raising borrowing costs for the first time since 2007 in a historic shift as the country puts decades of deflation behind it. Kazuo Ueda, the BoJ governor, brought an end to more than a decade of ultra-loose monetary policy, abandoning a swath of easing measures that were put in place to stimulate Asia’s most advanced economy.
Core inflation, which excludes volatile fresh food prices, slowed in January for the third straight month. “Given the current outlook for economic activity and prices, the bank anticipates that accommodative financial conditions will be maintained for the time being,” the BoJ said. On Tuesday the central bank also removed its yield curve controls, another policy put in place in 2016 to reinforce its massive monetary easing measures by capping the yields of 10-year Japanese government bonds.