IDEAS home Printed from https://ideas.repec.org/p/boj/bojrev/rev25e01.html
   My bibliography  Save this paper

The Bank of Japan's Finances and Simulations for Profits and Capital

Author

Listed:
  • Policy Infrastructure Division, Monetary Affairs Department

    (Bank of Japan)

Abstract

The Bank of Japan deems it important to gain a broad understanding of its thinking on central bank finances and monetary policy conduct, and has thus been releasing various communications with regard to how monetary policy conduct affects central bank finances. This paper restates this mechanism and presents simulations for the Bank's future profits and capital by using certain assumptions based on interviews with market participants, taking into account recent changes in monetary policy conduct, including the change of its monetary policy framework and policy interest rate hikes. The results show that, in a scenario in which interest rates are priced in by the market rate, the negative impact on the Bank's finances is limited. Under more severe assumptions, on the other hand, a certain level of financial risk was indicated. The Bank of Japan will continue to ensure its financial soundness in light of the simulation results.

Suggested Citation

  • Policy Infrastructure Division, Monetary Affairs Department, 2025. "The Bank of Japan's Finances and Simulations for Profits and Capital," Bank of Japan Review Series 25-E-1, Bank of Japan.
    • Handle: RePEc:boj:bojrev:rev25e01
    as

    Download full text from publisher

    File URL: https://www.boj.or.jp/en/research/wps_rev/rev_2025/data/rev25e01.pdf
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boj:bojrev:rev25e01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bank of Japan (email available below). General contact details of provider: https://edirc.repec.org/data/bojgvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.