Bank of Japan ends the world's only negative rates regime in a historic move, abandons yield curve control

The Bank of Japan (BOJ) raised its short-term interest rates from negative 0.1% to around 0% to 0.1%, marking the first increase since 2007. This move signals the end of the world’s only negative rates regime. Although the central bank pledged to maintain accommodative financial conditions, it abandoned its yield-curve control policy. The BOJ will continue purchasing Japanese government bonds at a similar rate, but it plans to cease purchases of exchange-traded funds and Japan real estate investment trusts. The scaled-back asset purchases aim to gradually reduce commercial paper and corporate bond purchases. The Japanese yen weakened and the Nikkei stock index fluctuated in response to the BOJ’s decision.