Mises Daily
Author:
Frank Shostak
Online Publish Date:
The Bank of Japan’s zero interest rate policy since early 2001 has created an incentive to borrow in Japan at close to zero interest rates, and employ the borrowed money to buy high yielding assets such as US 10-year Treasury Notes. For instance, an individual borrows ¥106,200 from a Japanese bank at 0.5% interest rate, which he then exchanges