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Hole-in-the-wall izakayas (traditional bars), ryokan (traditional inns), and Shinto shrines often accept cash only. STR/Getty ImagesTake Japan's millions of vending machines. The Japan Vending Machine Manufacturers Association recently said that almost 80% of the country's machines would need upgrades to accept the new notes, per comments reported by Reuters. Vending machines are a common sight in Japan. If they're stopping by a vending machine there anytime soon, they may want to check first if their bills will work.
Persons: , Omotesando, Bank of Japan — Organizations: Service, Business, Kansai region's, Japan Vending Machine Manufacturers Association, Reuters, Bank of Japan Locations: Japan, Ginza, Tokyo, Kansai, Kansai region's Osaka
“Quantitative tightening,” or QT, by top central banks will suck $2 trillion in liquidity out of the financial system over the next two years, according to a recent analysis by Fitch Ratings. Investors and banks calibrate their strategies to the amount of money in the financial system, he noted. Then, central banks started withdrawing liquidity from the financial system. Even worse, many banks have large holes on their balance sheets because central banks have simultaneously jacked up interest rates. While government debt levels have skyrocketed in recent years, the cost of servicing that debt has been tamped down by the willingness of central banks to buy large chunks of it.
European markets are heading for a positive open on Wednesday, reversing a negative trend seen in the previous trading session. Regional markets were lower Tuesday as investors were caught off guard after Japan's central bank widened its cap on 10-year Japanese government bond yields. The European Central Bank last week hiked its key interest rate from 1.5% to 2% and said it would look to shrink its balance sheet by around 15 billion euros ($15.9 billion) every month from March 2023 to the end of the second quarter. The ECB said rate hikes would need to continue "significantly at a steady pace." The Bank of England and the Swiss National Bank struck similar tones last week and also opted for 50 basis point hikes, matching the U.S. Federal Reserve's decision last Wednesday.
The Bank of Japan Steals Christmas
  + stars: | 2022-12-20 | by ( Jacky Wong | ) www.wsj.com   time to read: 1 min
Haruhiko Kuroda said the move is aimed at improving the functioning of the government bond market. The Bank of Japan —the last central bank holdout on ultralow interest rates—has sent global markets a nasty early Christmas surprise. The Japanese central bank surprised nearly everyone in the market on Tuesday by raising its effective cap on 10-year government bond yields to 0.5% from 0.25%. Under its yield curve control policy, the BOJ has long intervened to keep bond yields within a specified target range near zero. This latest tweak effectively raised the interest rate for this tenor: 10-year yields shot up to 0.41% from around 0.25%.
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