
Japan struggling with negative rate impact on swaps
Dealers facing issues with collateral interest payments and loan mismatches

Swaps market participants in Japan are struggling to find common ground as the country's central bank continues its experiment with negative interest rates.
The policy, which was introduced in January, implies a collateral poster would also have to pay interest, rather than receive it – a question that has split the market. As things stand, some parties will pay negative rates, while others insist the rate should be floored at 0%, creating funding and technology headaches.
Lawyers in the country
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