Japan banks boost resilience to rising interest rates, BOJ says

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TOKYO: Japanese banks have improved their resilience to rising interest rates by rebalancing domestic bond portfolios but growing real estate exposure poses a potential risk, the Bank of Japan said in its report on the financial system on Thursday (Apr 18).

TOKYO: Japan ese banks have improved their resilience to rising interest rates by rebalancing domestic bond portfolios but growing real estate exposure poses a potential risk, the Bank of Japan said in its report on the financial system on Thursday .

All types of banks have shortened the duration of their yen-denominated bond holdings, reducing interest rate risk especially in the longer-term zone, the BOJ said in its semi-annual report. The report also noted that from a macro perspective, an improving economy and the resulting rise in interest rates can be expected to lead to an improvement in household income and the interest-related balance.

Among potential risks, the BOJ cited banks' growing real estate-related exposure, built up particularly in metropolitan areas.

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