In its latest report published on Thursday, the Bank of Japan (BOJ) said that the Japanese “financial system remains stable as a whole.”
Additional findings
Financial intermediation is being fulfilled smoothly, underpinned by financial institutions' sound health.
Japan's financial system to remain 'highly robust' even if resurgence of covid, rise in u.s. Long-term rates hit economy, markets.
In event of substantial, rapid adjustment in markets, hit to financial institutions' health could exert downward pressure on economy.
Ukraine crisis on Japan’s financial system likely to be limited for now but high uncertainty on future developments.
Attention should be paid to chance impact of the Ukraine crisis on financial system will become larger.
Delay in Japan’s recovery could have adverse effect on loans to firms that had been hit hard by the pandemic.
Market reaction
USD/JPY is holding within the lower band of Thursday’s trading range so far. The yen was rescued by the reports of a likely extra budget agreed on by the Japanese ruling party. Further, the Japanese verbal intervention also could have helped the yen.
