-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessBOJ Financial Report: No Overheating; Bank Profits Too Low
TOKYO (MNI) - More than four years of aggressive easing by the Bank of
Japan has not caused any overheating in the economy or financial system but the
profitability of lenders remains low because there are too many of them, the
central bank said in its biannual Financial System Report released Monday.
"No imbalances in financial and economic activities can be observed on the
whole while the funding conditions for the nonfinancial private sector have been
highly accommodative," the central bank said.
"The real estate market does not seem overheated on the whole, although
transaction prices remain high in some places such as the Tokyo area."
The assessment was largely unchanged from the BOJ's previous report issued
in April.
"Signs of overheating in a large part of financial and economic activities
have not been observed on the whole, although the funding environment for the
nonfinancial private sector has been highly accommodative," the bank said six
months ago.
"Nevertheless, amid the continued low interest rate environment, banks have
adopted the most accommodative lending stance since the bubble period [of the
late 1980s]. With regard to the real estate market, it is necessary to carefully
examine whether there will be an excessive decline in risk premiums, etc.," it
also warned in April.
In the latest report, the BOJ analyzed the potential vulnerabilities due to
the decline in financial institutions' profitability.
"The low profitability of Japanese financial institutions is striking from
an international perspective. The number of financial institutions'
employees/branches may be in excess relative to demand," it warned. "This
structural factor in turn leads to a decline in financial institutions'
profitability through the intensified competition among financial institutions
in Japan."
The decline in population and the number of firms is a common shock
occurring throughout Japan, the BOJ noted.
"In this situation, the intensification of competition among regional
financial institutions would affect systemic risk by increasing the effects of
common exposure, that is, by decreasing net interest income," it said.
The BOJ called for examining both the risk of overheating -- excessive
accumulation of macro risks and exuberant asset prices, reflecting financial
institutions' shifts toward excessive risk taking to maintain profitability --
and the risk of a gradual pullback in financial intermediation due to a
persistent decline in profits.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com
[TOPICS: MAJDS$,MMJBJ$,M$A$$$,M$J$$$]
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.