Japanese Bank Holdings of Government Bonds Show Valuation Losses of '92 Trillion'... "Impact of Long-Term Interest Rate Rise"

According to local media reports on the 28th, the evaluation loss on government bonds held by the Bank of Japan, Japan's central bank, amounted to approximately 10.5 trillion yen (about 92 trillion won) as of the end of September.

On the same day, Japan's Kyodo News and Nihon Keizai Shimbun (Nikkei) reported that through the financial results from April to September this year, the Bank of Japan announced that the book value of government bonds as of the end of September increased by 7.6% compared to the same period last year, reaching 586.8781 trillion yen (about 5118 trillion won), while the market value was 576.378 trillion yen (about 5026 trillion won).

The evaluation loss on government bonds was 157.1 billion yen (about 1.37 trillion won) as of the end of March, but it has significantly increased in just half a year. According to local media, this is the largest loss since 2004 when the Bank of Japan began evaluating government bond amounts using the current criteria.

Local media analyzed that the bond prices fell because the Bank of Japan changed its monetary policy to allow long-term interest rates to rise. The 10-year government bond yield, a key indicator of Japan's long-term interest rates, rose to 0.97% on the 1st in the Tokyo foreign exchange market, marking the highest level in 10 years and 5 months.

Nikkei reported, "The Bank of Japan assumes holding government bonds until maturity," adding, "Although the increase in evaluation losses does not immediately affect profits, there is a view that if the market becomes uneasy about the Bank of Japan's financial condition, it could impact exchange rates and interest rates."

Earlier, Kazuo Ueda, Governor of the Bank of Japan, stated on the 9th at the House of Councillors (Upper House) Financial Committee regarding the evaluation loss on government bonds, "It will not affect our ability to conduct policy operations."

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