Determinants of the Japan Premium: Actions Speak Louder than Words

40 Pages Posted: 14 Jul 2000

See all articles by Joe Peek

Joe Peek

Federal Reserve Banks - Federal Reserve Bank of Boston

Eric S. Rosengren

Federal Reserve Bank of Boston - Supervision and Regulation

Multiple version iconThere are 2 versions of this paper

Date Written: July 1999

Abstract

Since August 1995, Japanese banks have had to pay a premium on Eurodollar and Euroyen interbank loans relative to their U.S. and U.K. competitors. This so-called Japan premium' provides a market indicator of investor anxiety about the ability of Japanese banks to repay loans. We examine the determinants of the Japan premium and find that government announcements not associated with concrete actions had little impact. On the other hand, announcements of concrete actions by the Japanese government, such as injections of funds into the banking system, tended to have an effect on the size of the Japan premium.

Suggested Citation

Peek, Joe and Rosengren, Eric S., Determinants of the Japan Premium: Actions Speak Louder than Words (July 1999). NBER Working Paper No. w7251. Available at SSRN: https://ssrn.com/abstract=227568

Joe Peek (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Eric S. Rosengren

Federal Reserve Bank of Boston - Supervision and Regulation ( email )

600 Atlantic Avenue
P.O. Box 2076
Boston, MA 02210
United States
617-973-3090 (Phone)
617-973-3219 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
26
Abstract Views
1,146
PlumX Metrics