TIBOR

TIBOR...LIBOR’s alter ego. Kind of.

TIBOR is the Tokyo Interbank Offered Rate, as LIBOR is London’s. There are two TIBORs: the Japanese yen one and the European one. Both are published by the Japanese Bankers Association (JBA) daily, right before lunch.

The Japanese yen TIBOR is the slightly older sibling of the two. It’s based on the call market rates of Japanese yen, similar to England’s LIBOR. Rather than being something “set” by the government, it’s the going market rate of how much banks are willing to lend each other money for.

The European TIBOR, or Euroyen TIBOR, was created a few years later, which is like the yen TIBOR, but for Japanese offshore market rates. While Japan opened up the world to its markets offshore in the late '80s to get that sweet international investment money, it didn’t create the Euroyen TIBOR until 1998.

TIBOR gives a right-now picture of short-term interbank lending rates, a key economic indicator for Japan’s Ministry of Finance, and anyone in the yen market.