The Bank of Japan on Tuesday introduced the nation's first-ever negative interest rate in a bid to conquer deflation at a time when the Japanese economy is facing a downturn and conditions for the global economy remain far from certain.
The central bank announced the policy on Jan. 29 as an additional monetary easing measure. It was slated to come into effect on Tuesday.
A negative annual interest rate of minus 0.1 percent will be applied to cash above a threshold held at the BOJ. Banks that hold the cash will essentially be charged a commission, which could hurt their profits and push down market interest rates.