HALISTER1: BOJ Starts Negative Rate; Few JPY Borrowers Seen: Central Tanshi

BOJ Starts Negative Rate; Few JPY Borrowers Seen: Central Tanshi

(Bloomberg) -- There are very few borrowers of JPY in Japan’s money market amid concern that BOJ’s negative rate could apply to their account balance at central bank, says Kenji Sato, manager, management planning at Central Tanshi.
  • Regional banks are looking to borrow while trust banks and insurers are seeking to offer, however, volume is considerably subdued compared with usual trading days: Tokyo-based Sato; NOTE: BOJ adopted negative rate last month, with rate of -0.1% to be applied to current accounts at central bank, starting Feb. 16
  • With few financial institutions having systems that can handle negative rates, a negative rate may not be seen in money market today and may not occur until next month: Sato; says these institutions seem to be in a hurry now to make their systems capable of coping with negative rates
  • “Trading in the unsecured overnight call market is centered around 0.001% with some at zero percent” today, says Sato
  • NOTE: Volume-weighted average of unsecured overnight call rate was at 0.074% yesterday, according to BOJ data
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Kenji Sato (Central Tanshi Co Ltd)

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