Mubasher: Japan's shares closed Tuesday in the positive territory as the Bank of Japan (BoJ) launched the negative interest rate policy for the first time.
The BoJ applies a negative interest rate of -0.1% to part of the accounts deposited by commercial banks in the central bank, which indicates that these banks have to pay a commission on some funds deposited in the BOJ.
Japanese Nikkei index closed 0.20% higher to 160,54.43 points, continuing its rise for the second straight session.
The broader Topix index leapt by 0.37% to 1,297.01 points, and the JPX-Nikkei Index 400 rose by 0.4% to 117,21.81 points.
Through this new policy, financial institutions will record lower returns on their accounts in the central bank and weaker loan yields.
Major commercial banks’ shares have fallen since the announcement of this policy.
Bank of Japan’s officials expect that the negative interest rate to be applied first to about JPY10 trillion or $87 billion of the funds deposited in the central bank, according to Japan broadcasting statement today.
