Major banks raised their ordinary deposit rates from a record-low 0.001 percent Tuesday for the first hike in six years, in response to the Bank of Japan’s decision last Friday to scrap its “zero-interest-rate” policy.
Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corp., Resona Bank and Chuo Mitsui Trust & Banking Co. increased their ordinary deposit rate to 0.1 percent.
Sumitomo Trust & Banking Co. raised its rate to 0.2 percent, meaning 1 million yen deposited for one year will earn 2,000 yen in interest, compared with 10 yen previously. The interest is still meager given that the rate topped 2 percent during the 1980s bubble economy.
Mizuho Bank will hike its ordinary deposit rate to 0.1 percent Wednesday.
The large banks also raised their rates on time deposits, by amounts ranging from 0.05 to 0.3 percentage point.
They are also expected to boost their prime lending rates, which serve as the benchmark rates for loans of less than one year.
In addition, big banks are expected to increase housing loan rates, with the rates on loans whose rates move in tandem with short-term rates, as well as fixed-rate loans of short maturity, projected to rise by around 0.25 point. The new rates are likely to take effect in August.
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