Monday, February 18, 2008

Freezing of Japanese Interest Rates

I recently read an article on bbc.com examine the freezing of interest rate by the Japanese Banks. It is concerning to me because Japan has gone ahead and froze interest rates while going against their naturally growing and strong economy. This was done because they looked at American struggling economy, especially in the borrowed money market, and they wanted to advert the some of the US’s problems. I do not necessarily disagree with the forward thinking of Japan, but I fear this move could cause an unnatural weakening of the Japan economy, which in turn could affect the global economy. It will be interesting to fallow how this bold move works out for Japan.

1 Comments:

Blogger Josh said...

The Freezing of the interest rates in Japan should not be surprising; the Japanese economy has been slowing for some time. After over investment in the eighties and real-estate worries in the mid 90s, Japan’s nominal GDP has not yet risen above it 90s level. As reported in the Economist on February twenty-first, most of the slow down is due to decreases in productivity and poor handling by politicians.

10:39 AM  

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