Tokyo money market adjusts to BOJ's negative interest rate

Tokyo

TOKYO'S money market is thawing as banks realise that it is better to pay interest to lend than face the cost of keeping money at the Bank of Japan (BOJ).

The outstanding amount of overnight interbank loans has more than doubled from a record low and the average interest rate reached a record at minus 0.081 per cent, near the BOJ's negative benchmark. Because the central bank only charges fees for new reserves that are not mandatory, it has taken time for the nation's lenders to adjust their policies. Trust banks started to charge savers to accept cash on April, analysts said.