i_godzuki Posted July 18, 2006 Share Posted July 18, 2006 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) Quote Link to comment Share on other sites More sharing options...
Realistbear Posted July 18, 2006 Share Posted July 18, 2006 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. Quote Link to comment Share on other sites More sharing options...
i_godzuki Posted July 18, 2006 Author Share Posted July 18, 2006 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? Quote Link to comment Share on other sites More sharing options...
The Colour Posted July 18, 2006 Share Posted July 18, 2006 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?" Quote Link to comment Share on other sites More sharing options...
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