Japan’s small rate rise may have a big ripple effect around the world
One of the biggest questions is what happens to money stashed overseas in assets including US government bonds, European power stations and Singapore equities.
The Bank of Japan finally ended an eight-year experiment with negative interest rates that has left more than $US4 trillion ($6.13 trillion) in funds hunting for higher returns abroad. What comes next threatens to shake up money flows in Japan and around the world.
One of the biggest questions is what happens to that big ball of money stashed overseas in assets, including US government bonds, European power stations and Singapore equities. So far, markets have taken Japan’s first interest rate rise since 2007 in stride, as the yield differential still remains wide with other major economies.
