TOKYO: The uncollateralized overnight call rate, a benchmark for short-term interest rates in Japan’s money market, rose above zero percent Thursday for the first time since March 2016.

The interbank lending rate climbed to a weighted average of plus 0.074% Thursday from minus 0.001% the previous trading day. The market was closed Wednesday for a national holiday.

The surge came after the Bank of Japan on Tuesday decided to terminate its negative interest rate policy in its first rate hike in 17 years.

The BOJ readopted the unsecured overnight call rate as a target of its monetary policy operations, saying it will guide the rate to around zero pct to plus 0.1%.

The rate applies to overnight loans that financial institutions, such as banks, securities houses and life insurers, take out from each other without collateral.

“Transactions at a rate of around 0.07% are seen increasing,” a market source said.

JIJI Press