In a semi-annual report analyzing Japan’s banking system, the Bank of Japan (BOJ) warned that if the coronavirus pandemic is prolonged, it could destabilize the Japanese financial system, per Reuters.
Japanese financial institutions have increased risky lending, including lending to overseas energy firms, in search of higher yields amid years of ultra-low interest rates.
Such exposure to various risks is among factors the BOJ must take into account in scrutinizing Japan’s financial system.
We expect Japan’s financial system to remain sound but must be vigilant to developments.
USD/JPY eyes 107.00
With risk-off back in vogue amid looming coronavirus-related global economic uncertainty, the demand for the anti-risk yen is on the rise so far this Tuesday.
USD/JPY, currently, trades at 107.35, challenging daily low of 107.31 and losing 0.23% on the day.