Why Japan is the only major economy to maintain negative interest rates and what consequences this has for the country

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  • BBC News World

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While the United States has raised interest rates this year to curb rising inflation, the world’s major central banks have embarked on a similar crusade. Except for one: Japan.

Swimming against the tide, the world’s third-largest economy kept its interest rate at -0.1%, even as the country reached an inflation rate of 3%, the highest since 1991 (excluding a spike in 2014, when prices were affected by a tax increase traffic).

In many countries around the world, 3% inflation would be minimal (just ask Argentina, which is currently dealing with an 83% increase in the cost of living).

But by Japanese standards, this is the highest inflation in decades.

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