Currency of the Month – Japanese Yen: Improving Fundamentals or Head-Fake?

by Chuck Butler
Daily Pfennig

A funny thing happened on the way to the globally coordinated NIRP (negative interest rate policy) extravaganza, and the Japanese yen appears situated front and center to the mystery. At the end of January 2016, the Bank of Japan (BOJ) announced it would double down on its monetary strategy, applying a negative rate of 0.10% on excess reserves for financial institutional depositors.1 The policy move, joining the European Central Bank’s (ECB) move to NIRP in June 2014,2 requires depositors to actually pay for the pleasure of keeping excess reserves deposited in its banking system.

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