A $27 trillion challenge looms as Yen Libor shift deadline nears

As the deadline nears, worries are mounting that the country could face a disorderly transition come year-end marred by technical problems, legal disputes and increased interbank rate volatility

Japan is emerging as a key area of concern in the global migration away from the London interbank offered rate.

With just nine months until yen Libor is phased out, only a fraction of the roughly 3 quadrillion yen ($27 trillion) in derivatives pegged to the discredited benchmark have switched to alternative reference rates. A further $150 billion in cash products such as loans and floating-rate notes -- many of which can’t be easily shifted to new benchmarks -- aren’t due to mature until after Libor expires, Fitch Ratings says.

As the deadline nears, worries are mounting that the country