Mizuho to Raise Long-Term Prime Rate to 13-Year High

Tokyo, May 9 (Jiji Press)--Mizuho Bank said Thursday that it will raise its long-term prime rate by 0.1 percentage point from the previous month to 1.7 pct this month, the highest level since April 2011.

The hike in the long-term prime rate, which is a benchmark for interest rates on one-year and longer-term loans to large companies, reflects a rise in Japanese government bond yields on the back of a surge in such rates in the United States as well as the end of the Bank of Japan's negative interest rate policy.

SBI Shinsei Bank and Aozora Bank also said Thursday that they will raise their respective long-term prime rates to 1.7 pct. The three banks' new rates will take effect on Friday.

Mizuho said that the long-term rate hike is likely to have a limited impact as interest rates on many loans are currently based on the short-term prime rate, which is also used for variable rate housing loans.

Many banks have kept their short-term prime rates unchanged even after the BOJ ended its negative interest rate policy. If the central bank raises its policy rate, short-term prime rates may rise, affecting housing and corporate loans.

[Copyright The Jiji Press, Ltd.]