ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Markets

Japan's interbank lending rate slides under zero

Tibor down to minus 0.00818% amid ultralow interest rates

Japanese banks are being squeezed by the ultralow interest rate policy.   © Reuters

TOKYO -- A benchmark interbank rate has fallen below zero for the first time since its 1995 creation as the Bank of Japan stays the course on negative interest rates.

The Tokyo interbank offered rate -- a yardstick of banks' lending rates -- with the shortest maturity of one week sank to minus 0.00818% on Thursday from 0.00182% the day before. The three-month rate -- the most widely used benchmark for banks to set lending rates -- remained in positive territory.

In theory, a negative Tibor means that certain large banks could pay borrowers interest. But banks will likely stick with minimum rates of zero, based on widely shared interpretations of relevant law.

Mitsubishi UFJ Trust and Banking, Sumitomo Mitsui Banking Corp., Resona Bank, and the Bank of Yokohama were among those newly reporting negative rates to the Japanese Bankers Association, which calculates Tibor based on market transactions among financial institutions. The association, which publishes the rate daily, revised its calculation methods last July to better reflect market conditions.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media