Before too much longer, it might be the case that short-term interest rates in Japan will turn negative. Overnight, the BoJ announced that it was discontinuing the 0.1% floor on any purchases of government bonds (of less than one year) that it makes in the secondary market. This action allows for the possibility that the BoJ may end up buying government paper at negative yields before too long. The BoJ has had considerable difficulty over recent months conducting these rinban operations, consistently failing to attract sufficient bids.
In Germany, the Netherlands, Denmark, Switzerland and Belgium, investors are now happy to pay governments for the privilege of looking after their money. Japan may well join this group in coming months.