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BOJ tempers its negative interest rate plans

Published Tue, Mar 15, 2016 · 09:50 PM

Tokyo

THE Bank of Japan (BOJ) appears to have bowed to market concerns over its controversial policy to impose negative interest rates.

At its meeting on Tuesday, its Policy Board softened the language previously used, when it suggested that it might bring the rates even deeper into negative territory.

The board tempered this by saying that the BOJ would "examine risks to economic activity and prices and take additional easing measures in terms of quantity, quality and the interest rate, if judged necessary" in order to meet its inflation target.

The board also announced on Tuesday that it would exempt money reserve funds kept at Japanese trust banks from the negative rates.

At the same time, the central bank issued a slightly more pessimistic statement than previously on the near-term outlook for the economy. Analysts took this to mean that further monetary easing action could be needed down the r…

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