For the first time in its history, the Bank of Japan has introduced a negative interest rate.
The benchmark rate of -0.1% means that commercial banks will be charged by the central bank for some deposits.
It hopes this will be a disincentive to banks to save and prompt them to lend in another attempt to counter the continuing economic slump in the world’s third-largest economy.
It is a move that has been on the cards for Japan’s stagnating economy for well over 10 years.
The decision to go negative came after a narrow 5 to 4 vote at the Bank of Japan’s first meeting of the year on Friday.
According to the central bank, it will cut interest rates further into negative territory if need be for as long as it helps to achieve an inflation target of 2%.
