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Japanese Banks Raise Interest Rates

At least four major banks in the State of Japan have raised mortgage and deposits interest rates after the Bank of Japan raised other key interest rates on July 14, ending a five-year zero interest period. The four banks (the Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank, Sumitomo Mitsui Banking Corp. and Resona Bank) have raised their interest rates on interest rates from .001 percent to .01 percentage points.

The announcement came as welcome news for pensioners, who have not been receiving any interest on their savings during the last five years. Investors were also said to be happy with the move. The Japanese press says the Japanese banking industry is expecting regional banks to follow the move of the four major Japanese banks. All told, it has been six years since local banks have raised interest rates on ordinary deposits.

Sumitomo Trust & Banking Co. is providing the highest interest hike at .2 percent, which is twice the interest being offered by the four major players. Bank officials say the higher interest rate on ordinary deposits is expected to attract depositors who have been frustrated with the near-zero rates the last five years. The effect of their decision was quickly felt, as Sumitomo officials said the number of new deposit accounts were 1.5 times higher than the number before the rate hike in mid-July.