The Bank of Japan board Friday voted to introduce a negative interest rate policy in a 5 to 4 vote while keeping its monetary base target at ¥80 trillion in an 8 to vote.
The move was aimed at ensuring that consumers move away from a "deflation mindset" and included a statement that lower interest rates on excess reserves would be considered if needed.
Earlier, in Japan, household spending for December rose 1.0% month-on-month, below the gain of 2.0% seen and fell 4.4% year-on-year, compared to a drop of 2.4% expected. As well, National Core CPI rose 0.1% as expected.
In other month-end figures, the unemployment rate held steady at 3.3% and provisional industrial production for December slumped 1.4%, well below the drop of 0.3% month-on-month expected.
Australia reported private sector credit rose 0.5% in December, missing an expected 0.6% gain. Also in Australia fourth quarter producer prices rose 0.3%, missing a 0.6% quarter-on-quarter rise seen.
At the conclusion of its monetary policy meeting on Friday, the BOJ said it was adopting a negative interest rate of minus 0.1% and added that it will cut interest rates further into negative territory if necessary.
The central bank’s decision came as it struggles to reach its 2% inflation goal amid ongoing concerns over global economic growth and plummeting oil prices.
Meanwhile, investors began to eye the release of revised U.S. fourth quarter growth data due later in the day, after the Federal Reserve gave no indications on the pace of future interest rate hikes in its policy statement on Wednesday
Preliminary data on Friday showed that the annual rate of inflation in the euro zone rose by 0.4% this month, in line with expectations and after an uptick of 0.2% in December.
The European Central Bank targets annual inflation of close to, but just below 2%.
Core CPI, which excludes out food and energy costs, increased by 1.0% in January, exceeding forecasts for a 0.9% rise and after a 0.9% gain.
Earlier Friday, data showed that German retail sales fell 0.2% in December, compared to expectations for a 0.5% gain and after a revised 0.4% increase the previous month.
A separate report showed that Spain’s gross domestic product grew 0.8% in the fourth quarter, matching forecasts.
