MNI POLICY: BOJ FY2019 Net Profit Rises To JPY1.3 Trln

     TOKYO (MNI) - The Bank of Japan said Wednesday its net profit rose to

JPY1.295 trillion in fiscal year 2019, up from a profit of JPY586.9 billion in

the previous fiscal year as provisions for possible losses on bonds were cut.

     But the BOJ posted losses stemming from holding foreign currency assets due

to the yen's rise against foreign currencies; losses of JPY214.4 billion in

fiscal 2019 vs gains of JPY225.7 billion.

     At the end of March, dollar-yen stood at JPY107.54, up from JPY110.85 a

year before, while the euro-yen exchange rate fell to JPY118.63 from JPY124.35.

     In fiscal 2019, the BOJ increased its bond loss reserves by JPY383.7

billion to insure against losses from holding sizeable amounts of JGBs as the

large-scale monetary easing continued, down from JPY815.4 billion a year

earlier.

     The BOJ drew JPY107.2 billion from its foreign exchange loss reserves,

compared with addition of JPY112.8. The BOJ also said the return on holding

Japanese government bonds in fiscal 2019 was a record low of 0.247%, down from

0.276% in fiscal 2018.

     The outstanding balance of ETF (exchange traded-fund) held by the BOJ at

the end of March totaled JPY29.72 trillion, up from JPY24.8 trillion a year

earlier.

     Unrealized profits on ETFs were JPY308.1 billion, down from JPY3.91

trillion a year earlier.

     The total assets held by the BOJ at the end of March stood at JPY604.48

trillion, up JPY47.46 trillion, or 8.5%, from JPY557.02 trillion a year before

due to the bank's massive purchases of Japanese government bonds. The

outstanding balance of long-term JGBs held by the BOJ at the end of March

totaled JPY473.54 trillion, up from JPY459.59 trillion a year earlier.

     The outstanding balance of foreign assets rose to JPY25.97 trillion from

JPY6.73 trillion as the BOJ had provided huge dollar funds to commercial banks.

     The BOJ's capital adequacy ratio at the end of March was 8.79%, up from

8.71% a year before. The bank regards a fluctuation within 2 percentage points

above or below 10% as acceptable.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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