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Japan's Largest Banks to Increase Housing Loan Rates Following BOJ Policy Change

On Friday, Japan's three largest banks announced that they would raise interest rates for housing loans in the upcoming month.

Japan Central Bank
Japan Central Bank

This decision reflects a recent adjustment in the ultra-loose policy implemented by the Bank of Japan (BOJ).

Sumitomo Mitsui Banking Corp, the primary banking division of Sumitomo Mitsui Financial Group, will increase 10-year fixed-rate loans by 0.26 percentage points to reach 3.79%. Mizuho Bank, the main banking unit of Mizuho Financial Group, will also raise its rate by 0.3 percentage points to 3.50%. Mitsubishi UFJ Bank, a Mitsubishi UFJ Financial Group division, will be increasing its rate by 0.18 percentage points to reach 3.7%.

Each of these banks has special loan programs available to select customers, resulting in lower rates. Sumitomo Mitsui will charge a rate of 1.14%, Mizuho 1.60%, and Mitsubishi UFJ 1.05%.

Last week, the BOJ surprised the market by raising the cap on 10-year bond yields from 0.25% to 0.5%. This policy change prompted the decision by Japan's largest banks to increase housing loan rates.

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