Posted on 05 March 2009
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Posted on 19 December 2008
Tags: bank, bank cuts rate, bank of japan, central bank, central bank cuts, chief Japan economist, deep recession, Dow 30, Federal Reserve System, General Electric Co., Goldman Sachs, Interest Rates, Japan, Japan Central Bank, key interest rate, key policy rate, P500, S&P 500, Tetsufumi Yamakawa, The Bank of Japan, TOMOKO A. HOSAKA, United Kingdom, US Federal Reserve Bank, US Federal Reserve cut rate, Wall Street, Zero Interest Rate, zero rate policy
Is the world heading toward a zero rate policy? This question is being asked by hundreds of economists and businessmen. As evidence of deep recession is unfolding, bankers and economists are predicting that UK interest rates can hit zero any time now. The Bank of Japan’s decision to lower its key policy rate to 0.10 percent from 0.30 percent followed by US Federal Reserve Bank’s dramatic move is more proof to that fact that world is heading toward a global flat zero interest rate.
The Bank of Japan’s policy board voted 7-1 to cut the uncollateralized overnight call rate target from 0.3 percent. It was the second cut in less than two months. Japan’s interest rates have gone lower — they were effectively at zero from 2001 to 2006. TOMOKO A. HOSAKA of AFP reports
“The BOJ is in a similar situation to the Fed — the policy rate is down to a critical point, and policy conduct will inevitably shift to full-blooded quantitative easing,” said Tetsufumi Yamakawa, chief Japan economist for Goldman Sachs.

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