Markets are in turmoil as result of this action, especially as Kuroda himself just said a couple of weeks earlier that he wasn’t going to use negative rates. A quick trip to the Davos meeting with all wealthy hoy-p’loy  and he changes his mind, no doubt due to pressure from someone to try it out to see if it works. Well so far it hasn’t worked in Europe, it won’t work in Japan either and it won’t work in the US if the US Fed tries it out. What it does indicate is that central bankers are clueless about how to avoid deflation and stimulate economic growth. Yet, every news broadcast has some banker economist passing wind  comments about what central bankers are doing or not doing. A bit of a joke really.

What is really missing at this stage is analysis of what it really means to Average Citizen. One: It is a new chapter in governments war against their own people, in particular savers. Negative interest rates are probably the dumbest idea since central banking. The idea that someone would work hard all of their life, and then you would steal the proceeds from their hard work with negative interest rates (especially those in retirement) is the most insane disincentive to the hard work and the savings of the Japanese people, who have turned around the Japanese economy since World War II. Two: It’s the latest and most creative chapter in the ongoing currency wars — the ongoing race to the bottom among the world’s major currencies. The Japanese will succeed in decimating the yen as well as succeeding in decimating the savings of their citizens…

Bank of Japan Governor Haruhiko Kuroda sprung another surprise on investors Friday, adopting a negative interest-rate strategy to spur banks to lend in the face of a weakening economy.

Source: Bank of Japan Adopts Negative Rates, Keeps Asset-Buying Target – Bloomberg Business