Average Contract Interest Rates on Loans and Discounts (May)

The Bank of Japan published its Average Contract Interest Rates on Loans and Discounts for May 2026, posted as a statistical release compiled by the Bank's Financial System and Bank Examination Department. The feed carried the item on June 29; the document itself is stamped not for release until 8:50 a.m. JST on June 30, 2026.

Per the tables, the average contracted rate on new loans and discounts at domestically licensed banks was 1.710% in May on a total basis, against 1.686% in April. Within that, short-term new lending averaged 1.245% and long-term new lending 2.066% in May, per the release.

On the stock side, the average rate on outstanding loans at domestically licensed banks stood at 1.359% in May, up from 1.343% in April, per the release. Shinkin banks' outstanding total was 1.767%.

Per a note on the document, the data are uploaded to the BOJ Time-Series Data Search on or after the next business day. The figures exclude the Resolution and Collection Corporation and Japan Post Bank, per the release's compilation notes.

Background

The average contract rate series is one of the Bank of Japan's standing statistical windows onto how its policy settings pass through to the real economy. It aggregates the interest rates that banks actually charge on new and outstanding loans, split by maturity and by institution type — domestically licensed banks on one hand, and shinkin banks, the cooperative regional lenders serving small businesses and households, on the other. Because contracted loan rates move more slowly than market rates, the series is read as a gauge of transmission: how quickly changes in the policy environment reach borrowers.

The backdrop is Japan's long exit from extraordinary monetary easing. After decades of near-zero and then negative rates, the Bank of Japan ended its negative interest rate policy in March 2024 and has since moved policy rates gradually higher, ending yield-curve control and stepping back from massive asset purchases. Lending rates that would have been unremarkable elsewhere — above 1.5% on average — represent, for Japanese borrowers, the highest borrowing costs in a generation, and each monthly reading traces the slow repricing of the country's loan book.

What comes next

The data move to the BOJ Time-Series Data Search on or after the next business day, per the release note, and the June figures would follow on the usual monthly cycle. The reading to watch is whether the gap between new-lending and outstanding-stock rates keeps closing — the mechanical sign that Japan's higher rate environment is working through the existing loan book.