Bank of Japan posts record losses from government bond holdings

Bloomberg says that the Bank of Japan’s unrealized losses on government bonds hit a record high. Losses from government debt holdings tripled from a year earlier and totalled 28.6 trillion yen ($198 billion) at the end of fiscal 2024, according to the regulator’s report.

Japan's benchmark 10-year bond yield grew to 1.5% at the end of March from 0.73% a year earlier. Bloomberg notes that even a slight rise in yields reduces the value of the regulator's bond holdings, which account for over half of the central government’s outstanding debt. This situation highlights challenges the Bank of Japan will have to face while raising borrowing costs, the news agency says. 

Yet, the regulator is likely to proceed with rate hikes, Bloomberg adds. The head of Japan’s central bank Kazuo Ueda is trying to make progress toward the inflation target amid global uncertainty. In this regard, traders expect another rate hike before the end of this year.