One of Japan's top lenders, MUFG Bank (the banking arm of Mitsubishi UFJ) has said that it will lift the interest rate of its 5-year and 10-year yen deposits for the first time since 2011. The former will see a bump from 0.002% to 0.07% while the latter will see a jump from 0.002% to 0.20%.
They are the first large bank to announce such a move and that is a big bet on the likely fact that the BOJ is going to start normalising policy soon. But there's also the other side of the story as the announcement comes amid a further rise in Japanese government bond yields.
For the longest of time, these rates have been near zero and now with a push towards 1% for 10-year yields, that's a welcome development for lenders. And with the BOJ stating that the 1% mark is now more of a reference rate, higher yields look set to stay - for now at least - in Japan.
