Japan's Overnight Rate Goes Negative for First Time Since 2004
- Volume-weighted average rate declines to minus 0.002 percent
- Outstanding balance of call market plunged 73% on Tuesday
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Japan’s unsecured overnight call rate dropped past zero for the first time in more than a decade, a day after the Bank of Japan began charging interest on some lenders’ excess reserves.
The volume-weighted average for the rate in the overnight call market -- ground zero for funding because it is where banks lend to each other -- fell to minus 0.002 percent, the lowest since November 2004, according to BOJ data.