The Tokyo Interbank Offered Rate (TIBOR) is a benchmark interest rate used in Japan, similar to the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) used in other financial centers. TIBOR is calculated and published by the Japan Financial Services Association (JFSA) and reflects the rate at which Japanese banks are willing to lend to one another in the interbank market.TIBOR is used as a benchmark for interest rates on various financial products in Japan, including loans, mortgages, and derivatives. It is also used as a reference rate for a wide range of financial products and contracts, such as interest rate swaps, forward rate agreements, and other derivatives.TIBOR is published in five different maturities: overnight, 1-week, 1-month, 2-month, and 3-month. The rate is calculated based on a survey of a panel of banks, which is conducted by the JFSA. The survey asks the banks to submit the rate at which they could borrow funds, were they to do so by asking for and then accepting inter-bank offers in a reasonable market size, just prior to 11:00 am.TIBOR is widely used as a benchmark in Japan and is considered to be one of the most important interest rate benchmarks in the country. However, as with any benchmark, TIBOR is not risk-free, and it is important for investors to understand the risks associated with using TIBOR as a reference rate.
