Bank of Japan rate hike will help households with high savings, burden those with high debt – Asia News Network

TOKYO – The Bank of Japan’s decision to raise a key interest rate is expected to have both positive and negative impacts on households and businesses. While interest earned on bank deposits will increase, burdens from borrowing, such as housing loans, will rise. Whereas the elderly are expected to benefit greatly from the interest rate hike, younger people are likely to be adversely affected.

In response to the central bank’s decision, three major banks — MUFG Bank Ltd., Sumitomo Mitsui Banking Corp. and Mizuho Bank Ltd. — announced Tuesday that they would raise interest rates on savings accounts by 0.1 percentage points to 0.4%, effective Aug. 3. The rate stood at 0.001% in March 2024, when the Bank of Japan…