Why are Japanese interest rates so low?

I am doing a presentation on the Yen Carry trade. Can you offer any input/Resources?

We will be discussing breifly why Japan's interest rates got so low. Does the savings rate have anything to do with the rates?

2 Answers

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  • 1 decade ago
    Favorite Answer

    Read up on the Crash in 1989. The Nikkei went from 39000 to 7800 over a 16 year period (a long slow death). It is currently at 9400.

    The central bank of Japan lowered interest rates to zero to spur economic growth.

    I would read up on:

    ZIRP (Zero Interest Rate Policy)

    Nikkei 225

    Modern Economic History of Japan

    The Crash of the Nikkei 225

    Links:

    Bank of Japan - Reseach Paper Page (very technical)

    http://www.boj.or.jp/en/type/ronbun/index.htm

    International Monetary Fund

    http://www.imf.org/external/

    the search function on this site is horrible

    Wikipedia is a good source but be careful because it is written by anyone and you may not get accurate data.

    I would start at those 2 places first.

    Also savings rates have nothing to do with this.

  • what?
    Lv 6
    1 decade ago

    it's because they've been in a severe recession for the last two decades.

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