BOJ adopts negative rate policy to boost spending

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BOJ adopts negative rate policy to boost spending

Bank of Japan Gov. Haruhiko Kuroda sprung another surprise on investors Friday, adopting a negative interest-rate strategy to spur banks to lend in the face of a weakening economy.

The move to penalize a portion of banks’ reserves complements the Bank of Japan’s record asset purchase program, including 80 trillion yen ($666 billion) a year in government bond purchases, which was kept unchanged at the board meeting. By a 5-4 vote, Kuroda led his colleagues to introduce a rate of minus 0.1 percent on certain excess holdings of cash.

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