Japan uses several reference rates. Shifts in interest rates generally indicate trends in monetary policy:

Policy Rate

The Bank of Japan (BOJ) Policy Board determines the target rate for uncollateralized overnight call lending among financial institutions, or the policy rate (called mutan), using open market operations. On 14 July 2006, BOJ abandoned its zero interest rate policy (ZIRP) for the first time in 5 years, raising the policy rate to 0.25%.

Basic Discount Rate

Formerly referred to as the Official Discount Rate, a change in the Basic Discount Rate (BDR), the rate at which BOJ lends short-term funds to commercial banks, is another gauge of the direction of BOJ monetary policy. Like the increase in policy rate, ODR was raised by BOJ from 0.10% to 0.40% on 14 July 2006. The ODR is considered a lagging indicator of monetary conditions.

Short-term Interest Rate

The major reference rate for short-term interest rates (overnight to 1 year) is the Tokyo Interbank Offered rate (TIBOR), calculated and administered every trading day by the Japanese Bankers Association (JBA).

Long-term Interest Rate

The coupon rate of newly-issued 10-year Japanese government bonds (JGBs) is the benchmark for long-term reference rates. Called zaito, it is an indicative rate that the Ministry of Finance charges for loans of state enterprises.

Repurchase Agreement Rate

BOJ publishes a repurchase agreement rate (repo rate), which helps develop the repo market. Data include a repo rate for General Collateral (GC), which is borrowing and lending JGB without specifying an issue and Special Collateral (SC) for specified issues. Data is released each business day at approximately 17:30 local time, and is available at the BOJ website. Historical data are also provided.