BOJ’s Latent Losses on JGB Holdings Hit Record 45 T. Yen

Tokyo, May 27 (Jiji Press)–Unrealized losses on the Bank of Japan’s holdings of Japanese government bonds hit a record high of 45,441.4 billion yen at the March 31 end of fiscal 2025, BOJ data showed Wednesday. Latent losses expanded sizably from the year-before level of 28,624.6 billion yen as market prices of JGBs fell in line with climbs in their yields reflecting an interest rate hike by the BOJ and inflation concerns. JGB prices and yields move inversely. The BOJ basically holds JGBs until their maturity and does not assess them at market value. Latent losses are not realized in the central bank’s earnings reports and therefore have no impact on its financial condition, a BOJ official said. The balance of BOJ-held JGBs fell 7.8 pct year on year to 530,869.5 billion yen as the central bank is reducing JGB purchases as part of its monetary policy normalization. Meanwhile, unrealized profits on exchange-traded funds held by the BOJ reached a record 57,065.7 billion yen, up from 32,871.2 billion yen a year before, on the back of higher stock prices. The BOJ’s net income in fiscal 2025 fell to 1,926.3 billion yen from 2,264.2 billion yen. This was because interest payments on commercial financial institutions’ current account deposits at the central bank increased to 2,710.4 billion yen due to the BOJ’s interest rate hike. The deposit interest payments exceeded the BOJ’s interest income from JGBs, which totaled 2,518.2 billion yen, the first such phenomenon on a full-year basis. The BOJ will pay 1.83 trillion yen, or the net income minus legal reserves and dividend payments, to the state coffers. END [Copyright The Jiji Press, Ltd.]