Mizuho Corporate Bank has announced it is cutting its long-term prime rate by 0.1 percentage point to a record low 1.25 percent per annum, effective Tuesday.
The reduction is the fifth in as many months. The long-term prime rate is charged on loans of one year or longer to the most creditworthy corporate clients.
It is the fourth straight month that Mizuho has cut the rate to a record low.
The bank, a unit of Mizuho Financial Group Inc., said it will keep its short-term prime rate unchanged at 1.375 percent per annum, leaving it higher than the long-term prime for the second straight month.
It is rare for the short-term prime to stay above the long-term prime. The situation last occurred in Japan between 1990 and 1991.
Mizuho sets the long-term rate 0.9 percentage point higher than the coupon on five-year bank debentures.
The rate cut reflects falls in yields on outstanding debentures issued by the bank following recent slides in government bond yields induced by steady inflows of investment funds into the government bond market.
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