On January 29 the Bank of Japan eased monetary policy further by announcing the implementation of negative interest rates of -0.1% on reserves above a certain threshold that financial institutions park at the central bank. In a three-tiered approach, balances below this threshold will either be charged either zero percent interest or 0.1%, which is the overnight target rate and has remained unchanged since 2008. By charging banks to keep excess reserves at the central bank, the BOJ incentivises these institutions to hold cash and strive to lend it out, which should stimulate the credit cycle and boost the economy ... (read more)