JAPANESE BUSINESSES, CONSUMERS BRACE FOR IMPACT OF HISTORIC MONETARY SHIFT

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JAPANESE BUSINESSES, CONSUMERS BRACE FOR IMPACT OF HISTORIC MONETARY SHIFT – Bank of Japan ended its nearly decade-long negative interest rate policy

Japanese businesses and consumers are bracing for the impact on currencies and borrowing costs after the Bank of Japan ended its nearly decade-long negative interest rate policy.

The move announced on Tuesday March 19th saw the Japanese central bank finally join its global peers in tightening policy.

Satoaki Kanoh, the president of plastic products maker Shinshi Co, is worried about higher borrowing costs. His company wants to replace ageing machinery in its two factories and would need to borrow money from banks.

The yen has been hamstrung due to the wide gap in interest rates between Japan and other countries that have already been raising rates.

Yet despite the BOJ’s move, the yen has weakened further, beyond 150 to the dollar, on the view that Japan’s pace of rate hikes will be slow while U.S. rate cuts may be delayed.

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