Japan's Money Market Shows Signs of Life
- Banks have become accustomed to negative-rate environment
- BOJ created tiered system to limit negative side effects
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For Japan’s money market, it turns out that there’s life after negative interest rates after all.
In a development that marks a win for Bank of Japan policy makers anxious to preserve a key cog of the financial system, the volume of interbank loans is recovering following a sharp pullback in the aftermath of the introduction of a negative rate on a portion of banks’ reserves.