Japan regional banks raise deposit rates following Bank of Japan hike

Following the Bank of Japan's decision to raise the policy interest rate to 1.0%, with expectations of a further increase to 1.5% within the year, the Japanese banking landscape is undergoing a significant shift. The era of ultra-low interest rates and excess liquidity is ending, prompting banks to focus on gathering deposits to fund increasing demand for capital investments.

In the Hokuriku region, regional banks have responded by raising interest rates on both ordinary and time deposits. While ordinary deposit rates have been standardized across five major regional banks in Toyama, Ishikawa, and Fukui prefectures, time deposit rates vary by prefecture and institution. Banks are engaging in active competition to secure deposits, with some offering special high-interest campaigns for customers who direct salary or pension payments to their accounts to avoid losing market share to competitors.