Japanese banks' rising overseas loan exposure could be risky: BOJ

Tokyo

PUSHED by declining interest rates in Japan and their recent dip into negative territory, Japanese banks have stepped up their overseas lending dramatically to the point where the Bank of Japan (BOJ) now feels that vigilance is called for over currency risks that banks may be courting.

The introduction of negative interest rates is having both positive and negative effects on the nation's financial system, according to the BOJ's latest Financial System Report. The system is functioning "smoothly" overall but some problems are beginning to appear, the report says.