Macroeconomic round up: Backlash in Japan and oil prices shift back up… slightly
Jason Walls breaks down Japan's drastic economic steps. With special audio feature.
Japan launched its negative interest rate initiative this week, hoping to stimulate growth and inflation in the economy.
Although the plan started out favourably, with the yen's value decreasing upon the news, now the dust has settled some problems are emerging.
Japanese bank stocks have slumped – some by as much as 30% as it is widely expected they will not pass the negative rates on to savers.
In the time since the Bank of Japan’s board made the negative interest rate announcement, the benchmark Nikkei index has fallen 8.5%.
It is believed introducing negative interest rates at a time when there were already unprecedented levels of global volatility made the situation worse.
Once factor which has fuelled market volatility in 2016 is low oil prices.
This week, there was some good and bad news for oil producers. Although Iran showed reluctance to slow down its oil production, an agreement between oil officials in Russia, Saudi Arabia and other OPEC members led to a freeze on crude oil output.
This means Saudi Arabia is limited to 10.2 million barrels a day and Russia 10.9 million.
The announcement pushed the prices of crude oil up but a barrel of oil is still less than $30.
It would seem that oil has been on the mind of chairwoman Janet Yellen at the US Federal Reserve as well.
The minutes of the Fed’s 26-27 January meeting reveal that concerns about oil and China are slowing expectations of further rate hikes in the US.
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NBR Radio
Fri, 19 Feb 2016
Fri, 19 Feb 2016
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Macroeconomic round up: Backlash in Japan and oil prices shift back up… slightly
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