The lack of signalling on any future rate hikes weighed on the yen — which slid past the closely watched 150 mark versus the dollar — while benchmark government bond yields edged lower. The weaker currency supported Japanese equities, helping the Nikkei 225 Stock Average reclaim the key 40,000 level.
The Bank of Japan scrapped the world’s last negative interest rate, ending the most aggressive monetary stimulus program in modern history, while also indicating that financial conditions will stay accommodative for now.
The bank’s board voted 7-2 to set a new policy rate range of between 0% and 0.1%, shifting from a -0.1% short-term interest rate, according to a statement at the conclusion of its two-day meeting Tuesday. The BOJ also scrapped its complex yield curve control program while pledging to continue buying long-term government bonds as needed, and ended purchases of exchange-traded funds.
