
US dollar/yen basis blows out to –100 on negative rates
Bank of Japan policy adds to domestic banks’ dollar funding dilemma

The Bank of Japan's introduction of a negative interest rate policy has pushed the dollar/yen cross-currency basis to –100 basis points for the first time in four years, making it more expensive for Japan's banks to raise US dollar funding to invest in higher yielding assets abroad.
The central bank's move to apply a negative interest rate to some dealer account balances at the Bank of Japan has
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