Wednesday, Feb 21, 2007
Japan tightens monetary policy
BBC News: Japan ups interest rates to 0.5%
Japan's central bank has showed signs of confidence in the country's economy, raising interest rates to 0.5%. It said the decision - only its second interest rate rise in more than six years - had been made because Japan's steady growth was likely to continue.
Posted by webmaster @ 07:02 AM (151 views) Add Comment
6 Comments
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1. Whiteknight said...
The central banks will all try to maintan the line as long as is possible, like good gentlemen.
However, in defence of currency there will soon be a race back to higher rates. Remember this phrase ... "In defence of currency".
2. dohousescrashinthewoods said...
It's the end of the [economic] world as we know it.. ;)
I wonder at what point the carry trade will unwind?
3. bidin'matime said...
Japanese interest rates double overnight - sounds pretty drastic to me!
4. mrmickey said...
Interesting that the Yen weakened after this rate rise, more rate rises on the cards then. The global money lake may be drying up.
5. autopilotengage said...
The impact of Japan starting to tighten is very easy to underestimate, hugely significant. At what other time have banks been falling over each other to lend you money at real "cost" to themselves? how could that possibly be sustainable? what an enormous impact it's going to have when no-one is any longer offering 0% credit cards, 4% discounted mortgages, etc.
6. sirgoogle said...
Since Barclays made such a profit yesterday on the back of borrowing Yen at 0.1 / 0.25% and selling at 5 - 7% to Brits this is good news as it means the party on cheap credit is starting to be over and the fat profits for the banks.
Expect to see mortgage rates to go up without the need for base rate rises. These should be in addition to the "defence of currency" point made by Whiteknight.