BOJ Says 90% of Japanese Banks Increased Risky Assets After QE

Over 90 percent of Japanese banks have increased loans and investment in riskier assets in the past year, the Bank of Japan said on Wednesday, suggesting that the wall of money it is pumping out is spilling over into the broader economy.

“Financial institutions have reduced investment in domestic bonds, especially Japanese government bonds (JGBs), while increasing investment in relatively high-risk assets such as loans,” the central bank said in a semi-annual report analyzing Japan’s financial system.

The ratio of banks that increased investment in riskier assets, including loans, has gradually risen since last March and exceeded 90 percent in February, according to a survey included in the report.

Banks are lending to a wider range of industries and are more keen to lend to small- and medium-sized companies whose appetite for loans is on the rise, the report said.

Bank lending rose 2.1 percent in March from a year earlier, marking the 29th straight month of increase, with lending by regional banks up 3.2 percent, a monthly BOJ data showed.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza