One of Japan’s biggest banks have raised its deposit rates for the first time in 12 years

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.