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BOJ reserve payments threaten to break bank

Interest may exceed bond income as central bank exits from quantitative easing

Thu, Aug 13, 2015 - 5:50 AM

Mr Iwata says that the market value of BOJ's ETFs and Reits could fall below book value.

PHOTO: BLOOMBERG

Tokyo

THE Bank of Japan (BOJ) is flagging a source of losses as it plots an exit from bond-buying stimulus: a surge in the interest it pays banks for their reserves.

Deputy governor Kikuo Iwata said last week that there is potential for those payments to exceed income on the...

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