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Japanese Rates Surge

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Not quite sure what to make of this..

July 18, 2006

Interest Rates Shoot Up Beyond BOJ Target Level

TOKYO (Nikkei)--Interest rates on unsecured overnight call loans, a tool of the Bank of Japan's monetary policy, soared far above the central bank's target of 0.25% Tuesday, the first trading day since the BOJ ended its zero interest rate policy last Friday.

Some transactions even closed above 0.4%, the same rate as on the BOJ's Lombard-style overnight loans to private-sector financial institutions that serve as an effective upper limit on overnight interbank loan rates.

In an attempt to arrest the surge in short-term interest rates, the BOJ injected a total of 1 trillion yen into the money market in two stages in the morning and afternoon.

Large banks have sharply hiked their lending rates in response to the end of the zero rate policy and the rise in the target overnight call to 0.25%.

(The Nihon Keizai Shimbun Tuesday evening edition)

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Not quite sure what to make of this..

July 18, 2006

Interest Rates Shoot Up Beyond BOJ Target Level

Seems unremarkable. If the source hikes .25% the feeders along the chain are going to mark up their rates to make a profit. The end user, the housebuyer/owner, already priced out using normal lending criterea, will just have to pay more this late in the cycle. More to come whether Gordon likes it or not. :)

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Seems unremarkable. If the source hikes .25% the feeders along the chain are going to mark up their rates to make a profit. The end user, the housebuyer/owner, already priced out using normal lending criterea, will just have to pay more this late in the cycle. More to come whether Gordon likes it or not. :)

But why would the BOJ pump in a trillion yen?

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But why would the BOJ pump in a trillion yen?

It's almost like them saying "OK we have screwed you by raising interest rates, but here's some nice liquid for the money markets that you can borrow at nearly zero, there there that's better now isn't it?"

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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