Japan banks improve resilience to rising interest rates by rebalancing domestic bond portfolios.
Japan banks have improved resilience to rising interest rates by rebalancing domestic bond portfolios, says the Bank of Japan. All banks have shortened the duration of yen-denominated bond holdings, reducing interest rate risk. While Japanese banks have sufficient capital and stable funding bases, vigilance against tail risks is still necessary, as global monetary tightening and economic slowdown concerns can prolong stress periods.
April 18, 2024
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