Japan central bank incurs record valuation loss on bond holdings as yields creep up

THE Bank of Japan incurred record valuation losses on its government bond holdings in the first half of the current fiscal year due to rising long-term interest rates, the central bank said on Tuesday (Nov 29).

The valuation losses on Japanese government bond (JGB) holdings stood at 10.5 trillion yen (S$94.4 billion), which were the biggest loss since comparable records became available in 2004, according to the BOJ’s earnings report for the April-September fiscal first half.

The BOJ’s total assets stood at 741.5 trillion yen as of September, up 8.1 per cent from year ago levels, the report showed.

Global bond yields rose as major central banks, including the US Federal Reserve, hiked interest rates aggressively to combat soaring inflation.

JGB yields also crept up during the fiscal first-half, as the BOJ relaxed its grip on long-term interest rates by tweaking its bond yield control policy in July. REUTERS