Enter Details

Comment on stories, receive email newsletters & alerts.

This is your permanent identity for Business Insider Australia
Your email must be valid for account activation
Minimum of 8 standard keyboard characters


Email newsletters but will contain a brief summary of our top stories and news alerts.

Forgotten Password

Enter Details

Back to log in

The Yen is rallying and it raises big questions about central bank power

Photo by Keith Tsuji/Getty Images

The Japanese yen – despite the decision by the Bank of Japan to implement a negative interest rate policy just over a week ago – rallied strongly in overnight trade, bolstering the growing view among markets that central bank policy is losing its potency.

The USD/JPY daily chart from below shows the recent movements in the yen.

After rallying above 121.50 in the immediate aftermath of the BOJ decision on January 29, the yen has done nothing but strengthen with the USD/JPY falling to as low as 115.20, the lowest level seen since November 2014.

Only last week Bank of Japan governor Haruhiko Kuroda described the decision to implement negative interest rates as “the most powerful monetary policy framework in the history of modern central banking”.

He also said “there is no limit to measures for monetary easing,” hinting the bank could implement further policy easing if required.

However, if this is the reaction to the most powerful monetary policy framework in the history of modern central banking, one has to wonder what, if anything, central banks can do to achieve even a modest policy benefit from now on.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at