Statement on Monetary Policy

When inflation rates rise in a country, central banks may rise interest rates to control inflation. Higher interest rates may make that currency more attractive to foreign investors seeking higher returns on their investments. As a result, demand for the currency may increase, causing its value to rise. Traders can take advantage of this by buying the currency before the interest rate hike and selling it afterwards, potentially profiting from the price increase.

4% inflation in Japan?? Hoho we making money this year boys

Negative interest rates are a monetary policy tool used by central banks to stimulate economic growth by encouraging spending and investment. When a central bank imposes negative interest rates, it effectively charges commercial banks for holding excess reserves. This encourages commercial banks to lend money to individuals and businesses, as holding reserves becomes more expensive.

One potential effect of negative interest rates on the currency is that it can lead to a depreciation of the currency's value. This is because investors may seek higher returns in other currencies or assets, as the negative interest rate makes holding that currency less attractive. As investors sell off their holdings of the currency, its value may decline.

However, the impact of negative interest rates on a currency's value is not straightforward and depends on various factors such as the overall economic conditions of the country, the level of inflation, and the expectations of future interest rates. In some cases, negative interest rates may not lead to a significant depreciation of the currency if other factors are at play.

Overall, the impact of negative interest rates on a currency's value is complex and can vary depending on the specific circumstances. It is important to consider the broader economic context and the potential effects on investment and spending before concluding how negative interest rates may impact a currency.

Japanese government and central bank to support the economy during the pandemic are having a positive impact. As the effects of the pandemic and supply constraints continue to fade, it is likely that the Japanese economy will continue to improve.

but they are applying a negative interest rates here, how will that help the currency?

Exactly, Central banks maaaaay increase interest rates. In my modest opinion, for Japan a hike intrest rates to bring down the inflation from 4% is highhhhly unlikely. I wouldn't bet my last dollar on an increase in interest rate under current conditions and system in Japan....

hi can you explain how please.