BOJ remarks on the financial system

  • Credit risk of overseas loans generally contained
  • But there are signs of deterioration in some portfolios affected by the pandemic
  • Even as pandemic subsides, low rates and structural factors will continue to exert downward pressure on financial institutions' profits

The final remark is arguably what stands out the most as it reaffirms that the central bank will not be moving away from its ultra-loose policy.

As mentioned before, the pandemic has only served to exacerbate the problems faced by the Japanese economy - not bring about fresh ones. As such, don't expect the pandemic recovery to change much of the policies already in place.