In the twice-annual Financial System Report.....>

BOJ: In the twice-annual Financial System Report due on the 22nd of October, the

Bank of Japan (BOJ) is expected to say it sees no signs of financial

overheating. The BOJ will note that both the excessive risk-taking in real

estate and foreign bond investments and the risk that banks have become

unwilling to lend because of low profit margins have not improved nor worsened

since April when the BOJ warned about these side affects of its aggressive

monetary easing.

- The BOJ will also say the commercial banks have not become any more aggressive

in their lending than they were six months ago, indicating it sees no risk of a

financial bubble forming because banks are looking for higher returns on

investments amid zero interest rates but, they are also expected to repeat the

warning that excessive competition among financial institutions can reduce their

profitability, thereby undermining their business stability.

-Lastly the BOJ is expected to repeat the overall risk assessment of the

financial industry it presented in April. (MNI INSIGHT)