BOJ Says Japan’s Banking System Stable, Warns of Risks

BOJ Says Japan’s Banking System Stable, Warns of Risks
A man wearing a protective mask walks past the headquarters of the Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, on May 22, 2020. Kim Kyung-Hoon/Reuters
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TOKYO—Japan’s banking system remains broadly stable but financial institutions could face risks including from a possible increase in credit costs caused by a delay in the economic recovery, the Bank of Japan (BOJ) said in a report on Thursday.

Financial institutions also risk incurring losses on their securities investment portfolios in the event of a rapid market adjustment, the BOJ said, adding the central bank must remain vigilant.