Japan banks' capital sufficient to withstand stresses, BOJ says
Japanese banks have improved their resilience to rising interest rates by rebalancing their domestic bond portfolios, the Bank of Japan said in its semi-annual report on financial systems on Thursday (Apr 18).
The BOJ’s latest analyses of risks in the financial system come as the central bank ended eight years of negative interest rates last month, making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.
All types of banks have shortened the duration of their yen-denominated bond holdings, reducing interest rate risk, especially in the longer-term zone, the report said.
It also noted that from a macro perspective, an improving economy and the resulting rise in interest rates can be expected to lead to an improvement in household income and the interest-related balance.
Overall, Japanese banks have sufficient capital and stable funding bases to withstand various types of stress, the report said.
But vigilance against tail risks was still warranted, it added, adding that the period of stress may be prolonged further with continuing global monetary tightening and the resultant concerns about a slowdown in foreign economies. REUTERS
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
ING unveils 2.5 billion euros buyback as profit beats estimates
DBS chief expects 2024 earnings to hit new highs as Q1 profit rises 15% to S$2.95 billion
Banking giants race to Riyadh as MBS steps up pressure campaign
Standard Chartered Q1 profit rises 5.5%, beats estimates
BlackRock, Citadel reap billion-dollar deals from Australia fund
Credit Suisse faces 50 billion won South Korea short-sale fine