Printer Friendly

Key money rate plunges close to zero on Tokyo market.

TOKYO, March 21 Kyodo


The bellwether rate on the Tokyo money market fell close to zero Wednesday, following a decision by the Bank of Japan (BOJ) to boost liquidity in the financial markets.

The weighted average of unsecured overnight call money rates, which commercial banks charge each other on overnight loans, came to 0.06%, down sharply from 0.13% Monday.

Wednesday's rate is considered close to zero in view of a 0.02 percentage point commission charged by money brokers.

The central bank pumped ample funds into the banking system with bill-purchasing operations Wednesday morning, leaving the amount of funds in accounts held by commercial banks at the central bank up 1.8 trillion yen from Monday at 5.56 trillion yen.

On Monday, the BOJ decided to shift its monetary policy target from the overnight call rate to the balance of funds held in current accounts at the central bank, effectively resuming the 18-month-old zero-rate policy it abandoned last August.

Although the decision, which took effect Wednesday, calls for boosting the balance to around 5 trillion yen from 4 trillion yen, the central bank steered the balance above the target amount in order to curb upward pressure on interest rates from the issuance of government bonds, a BOJ official said.

Money market insiders said the call rate is likely to drop to effectively zero from Thursday.
COPYRIGHT 2001 Kyodo News International, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Japan Weekly Monitor
Date:Mar 26, 2001
Previous Article:Effects of latest monetary easing may be limited, says Hayami.
Next Article:Dollar surges to upper 123 yen level in London.

Related Articles
LEAD: Key money market rate plunges in Tokyo.
Yield on Euroyen rate futures plummets on stock plunge.
LEAD: Yield on benchmark 10-year gov't bond sinks below 1.7%+.
BOJ likely to reinstate zero-rate policy Monday.
Kyodo economic news summary -5-.
Dollar rises to 117 yen level on Japan's weak machinery data.
Dollar falls to lower 118 yen level in Tokyo morning deals.
Kyodo economic news summary -3-.
Dollar falls into upper 88 yen range after Fed rate cut to near zero.
Kyodo economic news summary -3-.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |