Japan's long-awaited return to positive interest rates is step in right direction: Samantha Cory

Thus, negative interest rates were implemented in 2016 to stimulate spending and investment in the economy, which penalised those that saved.

However, as market sentiment has started to recover, the Bank of Japan has concluded that the economy can handle an increase to borrowing costs.

This move, alongside the Bank of Japan’s decision to abandon its yield curve control policy, represents a step in the right direction.

The policy was established in 2016, with the aim of encouraging spending and decreasing inflation risks, without dampening returns for financial institutions.

This was achieved by keeping short to medium rates low, at -0.1 per cent, and longer-term rates higher at roughly 0 per cent.

Together, the implementation of these policies over the years has created a positive impact on the economy, as wages have seen the most significant increase since 1991.

When wages rise, it often leads to heightened demand which positively impacts consumer spending and contributes to the Bank of Japan’s goal of reaching its 2 per cent annual inflation target.

While the recent policy adjustments represent optimistic developments and stimulated growth, there is still a long road ahead.

Challenges such as an ageing population, sluggish productivity growth, and high public debt, continue to place hurdles to sustained economic expansion.

In the UK, recent housing market data signals a more upbeat outlook for the year ahead. The surge in the number of agreed sales during the first two months of this year has captured the attention of many, as it hints at a potential resurgence in the real estate sector.

For homeowners, this revival offers hope of increased property values, while for aspiring buyers, it presents newfound opportunities to step onto the property ladder. While uncertainties may linger, the recent trends in the housing market serve as a potential beacon of optimism.

The recent launch of the Northern Powerhouse Investment Fund II (NPIF II) by the British Business Bank marks a significant step towards sustaining economic growth in the North of England.

With a substantial sum of £660m, this fund is designed to support innovation and create opportunities for local businesses in the region.

Numerous businesses have already reaped the benefits of this assistance, and now many more will follow suit.

Building upon the success of the 2017 launch, which injected over £445m into 552 businesses and generated 4,300 jobs in Yorkshire and the Humber, NPIF II aims to maintain this positive momentum.

By targeting businesses facing obstacles in accessing investment, the fund aims to dismantle financial barriers and provide essential support.

With a focus on fostering innovation and unlocking growth potential, NPIF II could provide an essential role in driving economic prosperity across the North of England.

Samantha Cory is part of the Investment Research Team at Redmayne Bentley