BoJ Shows First Loss in 4 Years After FX Assets Fell Versus Stronger JPY

The Bank of Japan incurred a net loss for the first time in four years during the April-September period, as the value of its foreign currency denominated assets fell against the backdrop of a stronger yen, the central bank said Monday.

In the six-month period, the BOJ posted a net loss of 200.24 billion yen ($1.8 billion), a reversal from a profit of 628.89 billion yen a year earlier, after booking an exchange loss of 697.62 billion yen.

In the first half of the current fiscal year, the U.S. dollar plunged nearly 10 percent from the end of March to around 101 yen as of the end of September, driving down the value of the central bank’s assets by several hundred billion yen, the source said.

The bank, however, is expected to return to the black during the October-March period, as the yen is back on a downward trend against the dollar amid growing expectations of stimulus measures by U.S. President-elect Donald Trump. The dollar traded around the 112 yen line Monday in Tokyo.

The BOJ’s total assets expanded 24.8 percent to a record 456.81 trillion yen, as the bank continues to purchase massive amounts of government bonds and other assets under its monetary easing policy.

via Mainichi

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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