Euroyen

By
Adam Hayes
Full Bio

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Learn about our editorial policies
Updated May 25, 2022
Reviewed by
Gordon Scott
Reviewed by Gordon Scott
Full Bio

Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT).

Learn about our Financial Review Board
Fact checked by
Daniel Rathburn
Daniel Rathburn Headshot
Fact checked by Daniel Rathburn
Full Bio

Daniel Rathburn is an editor at Investopedia who works on tax, accounting, regulatory, and cryptocurrency content.

Learn about our editorial policies

What Are Euroyen?

The term euroyen refers to all Japanese yen (JPY)-denominated deposits held outside of Japan. It can also refer to trading in yen in the eurocurrency market.

A eurocurrency is any currency held or traded outside its country of issue, and euroyen thus refers to all Japanese yen (JPY) deposits held or traded outside Japan. The "euro-" prefix in the term arose because originally such overseas currencies were held primarily in Europe, but that is no longer the case and a eurocurrency can now involve any domestic currency that is held anywhere else in the world that local banking regulations permit.

Key Takeaways

  • Euroyen refers to deposits denominated in Japanese yen (JPY) held outside of Japan itself.
  • Also known as offshore yen, the establishment of Euroyen allowed Japan to liberalize its capital markets and grow its position in international trade.
  • Rates on euroyen are set against a benchmark: either Euroyen TIBOR or Yen LIBOR.

Understanding Euroyen

Euroyen can also be referred to as "offshore yen," and refers to japanese yen held overseas. The offshore yen market was initially established in December 1986 as part of the liberalization and internationalization of Japanese financial markets and increased the country's stature in terms of global trade.

There are two euroyen benchmark rates: Euroyen TIBOR (published at 1 p.m. Tokyo time, with a panel dominated by Tokyo banks) and the Yen LIBOR (London Interbank Offered Rate, published at 11:55 a.m. London time with a panel dominated by non-Japanese banks in London).

Both domestic JPY and euroyen TIBOR rates are published by the Japanese Bankers Association (JBA), but after the LIBOR manipulation scandal broke in 2012 they have been published by a focused entity called the JBA TIBOR Administration (JBATA) in an effort to enhance the credibility of the published rates.

Both Yen LIBOR and Euroyen TIBOR rates were caught up in the LIBOR scandal. A number of large banks, both Japanese and foreign, paid hundreds of millions of dollars in settlement of euroyen-related claims and associated penalties arising from the case.

The Intercontinental Exchange, the authority responsible for LIBOR, will stop publishing one-week and two-month USD LIBOR after Dec. 31, 2021. All other LIBOR will be discontinued after June 30, 2023.

Euroyen Examples

Examples of euroyen would be yen deposits held in U.S. banks or banks elsewhere in Asia, and yen traded in London. Like all eurocurrencies, euroyen deposits fall outside the regulatory purview of the national central bank of the home country, the Bank of Japan (BoJ) in this case. Therefore, euroyen deposits may offer slightly different interest rates than those available for yen deposits in Japan.

Rates on JPY deposits in Japan are directly affected by interest rates set by the Bank of Japan and by liquidity in the Japanese money market, and are linked to a rate called Japanese yen Tokyo Interbank Offered Rate (TIBOR). Euroyen deposit rates, by contrast, are set in the eurocurrency market.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. JBA TIBOR Administration. "JBA TIBOR Rates." Accessed Dec. 8, 2020.

  2. Intercontinental Exchange. "LIBOR." Accessed Dec. 8, 2020.

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Service
Name
Description