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BOJ introduces negative interest rate to boost economy

FILE - In this Nov. 17, 2015 file photo, people walk on a pedestrian crossing at a shopping street of Ginza area in Tokyo. Japan's core inflation rate slipped to 0.5 percent in 2015, as low oil prices hindered efforts by Prime Minister Shinzo Abe to spur growth by pushing prices higher, according to data released Friday, Jan. 29, 2016. Japan's jobless rate was steady at 3.3 percent. Unemployment for all of 2015 was 3.4 percent. (AP Photo/Eugene Hoshiko, File) FILE - In this Nov. 17, 2015 file photo, people walk on a pedestrian crossing at a shopping street of Ginza area in Tokyo. Japan's core inflation rate slipped to 0.5 percent in 2015, as low oil prices hindered efforts by Prime Minister Shinzo Abe to spur growth by pushing prices higher, according to data released Friday, Jan. 29, 2016. Japan's jobless rate was steady at 3.3 percent. Unemployment for all of 2015 was 3.4 percent. (AP Photo/Eugene Hoshiko, File)

By Associated Press January 28, 2016 1 min read

TOKYO (AP) – The Bank of Japan on Friday introduced a negative interest policy in a move to boost a stumbling recovery in the world’s third-largest economy.

The central bank said it is imposing a 0.1 percent fee on some deposits left with the central bank, effectively a negative interest rate.

It hopes that will encourage commercial banks to lend more and stimulate investment and growth.

The move had an immediate impact on financial markets. Japan’s benchmark Nikkei 225 stock index, which had been down about 0.8 percent at midday, shot higher. The Japanese yen slid, with the U.S. dollar rising to 120.40 yen from about 118.50 earlier in the day.

The BOJ said in a statement that it would divide banks’ deposits into three tiers, with categories earning positive, zero and negative interest rates.