The Nikkei index dipped below 17,000 yen on Feb. 5 while the yen rose in the foreign exchange market — just a week after stocks had surged and the yen weakened as a result of the Bank of Japan’s surprise announcement that it would adopt a negative interest rate.
The return to the original state of affairs has prompted moves that could force individuals to review their asset management.
With the effects of the BOJ’s announcement having effectively disappeared, Japan’s three megabanks — The Bank of Tokyo-Mitsubishi UFJ (BTMU), Mizuho Bank and Sumitomo Mitsui Banking Corp. (SMBC) — decided they would reduce interest rates for fixed-term deposit accounts between two and 10 years starting Feb. 8. In the case of BTMU, interest rates will be cut by 0.015 percentage points to 0.06 percent, and for its “Super Teiki” (Super fixed-term accounts), whose deposits are less than 3 million yen, interest rates will be set at 0.025 percent for all fixed terms between one month and 10 years.
In response to the decisions made by Japan’s top three banks, other banks are expected to follow suit. Sony Bank, which only offers online banking, will reduce its interest rate for ordinary savings accounts to 0.001 percent, meaning that a deposit of 1 million yen in an ordinary savings account for a year will earn the account holder just 10 yen in interest.