TIBOR, also known as the Tokyo Interbank Offered Rate, represents the average interest rate at which Japanese banks lend unsecured funds to each other in the domestic interbank market. As a major benchmark, it plays a crucial role in the financial system.

The Japanese Bankers Association (JBA) calculates and publishes Tokyo Interbank Offered Rate daily. Consequently, it serves as an essential reference for financial institutions, corporations, and investors engaged in yen-denominated transactions.

What Tokyo Interbank Offered Rate (TIBOR)?

TIBOR stands for Tokyo Interbank Offered Rate. The Japanese Bankers Association publishes it at 11:00 a.m. JST on every working day.

The JBA TIBOR Administration (JBATA) sets TIBOR rates using quotes from a panel of major banks. These rates reflect market conditions and are published for six maturities:

• One week
• One month
• Two months
• Three months
• Six months
• 12 months

There are two types of Tokyo Interbank Offered Rate: the European TIBOR rate and the Japanese Yen TIBOR rate.

Tokyo Interbank Offered Rate serves as the daily reference rate. It is derived from the interest rates banks charge when lending funds to other banks in Japan’s interbank market.

Japan’s Ministry of Finance is the most influential financial government agency. It relies on TIBOR rates for analysis.

Tokyo Interbank Offered Rate oversees various functions. In the United States, these functions fall under agencies like the U.S. Department of Treasury, the Federal Reserve, the Department of Commerce, the Internal Revenue Service (IRS), and the Securities and Exchange Commission (SEC).

The JBA TIBOR Administration (JBATA) provides the highest and lowest maturity reference rates. It then calculates the average of the remaining rates.

These average maturity rates are published as Tokyo Interbank Offered Rate. Each day, six rates are published for both Euro Yen and Japanese Yen.

The European TIBOR rate is based on Japan’s offshore market rates. Japan created these rates in 1986 to help internationalize its financial markets.

The Japanese Yen Tokyo Interbank Offered Rate, publicly calculated and published by the Japanese Bankers Association since November 1995.

The Euro Yen TIBOR rates have been available since March 1998. Publishing the Tokyo Interbank Offered Rate has contributed to the growth of Japan’s short-term financial markets.

Calculation

Authorized information providers like Thomson Reuters Markets KK, Nomura Research Institute Ltd, Quick Corp, Jiji Press Ltd, and Bloomberg Finance L.P. publish Tibor rates.

If you come across any TIBOR rate published outside of the above-mentioned authorized information providers, consider it for informational purposes alone.

On April 1, 2014, the “Ippan Shadan Hojin” established the Japanese Bankers Association Tokyo Interbank Offered Rate Administration (JBATA), enabling them to calculate and publish JBA TIBOR on the same day.

The JBATA calculates the JBA Tokyo Interbank Offered Rate as a dominating market rate by using quotes for six different maturities — one week, one month, two months, three months, six months, and 12 months. The reference bank provides each maturity by 11:00 a.m. on each business day.