The Organisation for Economic Co-operation and Development has published its first report on Japan since January 2024, when the policy rate was still negative. Now, the OECD projects that the Bank of Japan will raise it to 2% by the end of 2027, marking a gradual shift toward normalization after years of aggressive stimulus.
The yen and fintech in the face of the new rate cycle 💹
This change of course directly impacts Japan's fintech sector. Digital lending platforms and payment systems, accustomed to an environment of cheap money, will need to adjust their risk models. Furthermore, the rising cost of credit could slow investment in tech startups, although it also opens the door to savings products with positive returns, something almost extinct in the last decade.
Japanese savers, between the mattress and joy 🏦
After decades of watching their money lose value under the mattress, Japanese savers might finally receive some interest on their accounts. But don't get too excited: 2% in 2027 is still less than what a good internet meme yields. That said, at least they can stop paying to store their savings, which is already progress for an economy that turned negative interest into a tradition.