Japan's funding conditions stay loose despite recent interest rate hikes
A Bank of Japan survey shows corporate fund demand rising, suggesting recent rate hikes have yet to tighten financial conditions, Reuters reports.
- published on Newsmetry
- original source published
the public page opens no earlier than 15 minutes after we detect the story. approved stories may reach the api sooner. connect the api →
what happened
Major Japanese lenders report higher corporate demand for funds than three months ago, according to a survey published on Thursday by Reuters. The diffusion index stood at +3, against -1 in the previous survey, meaning more banks saw demand rising than falling. The Bank of Japan conducted the survey between September 9 and October 13.
The central bank raised its policy rate to 1.25%, a 31-year high, on September 18, and signalled a shift toward preventing inflation from overshooting its 2% target. The BOJ says it will examine how past increases affect corporate funding to judge how close the rate is to a neutral level for the economy.
why it matters
Financial conditions are becoming a key factor in judging when the next rate hike could come. If lending stays loose, that strengthens the case for further tightening, which matters for the yen and Japanese government bonds. The signal is important because the effect of earlier hikes is still hard to see in corporate borrowing.
market impact
Yen and JGBs: loose funding conditions strengthen expectations of another BOJ rate hike
tags
instruments
sources
- Japan funding conditions still loose despite interest rate hikes, survey shows — Reuters, 22 October 2026 at 00:45 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
the public page opens no earlier than 15 minutes after we detect the story. approved stories may reach the api sooner.
get stories in real time ↗