BOJ to keep sharp eye on real-estate loans of financial bodies+
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[April 12, 2006]

BOJ to keep sharp eye on real-estate loans of financial bodies+

(Japan Economic Newswire Via Thomson Dialog NewsEdge)TOKYO, April 12_(Kyodo) _ The Bank of Japan said Wednesday it will keep a close watch on real-estate loans of banks and securities companies in inspecting the Japanese financial system in fiscal 2006.


In its annual report, the BOJ hinted that there is a need to forestall a renewed outbreak of an asset-inflated economic bubble by enhancing the risk-management practices of financial institutions, given that commercial land prices in some areas of Tokyo have recently risen sharply.

But Japan's central bank stressed that it has no intention of carrying out strict monitoring operations only on lending practices associated with real estate.


The BOJ called on financial institutions operating in Japan to better cope with risk management of interest rate volatilities in the just-started business year, which will end in March 2007.

Japanese interest rates have been on an upward momentum since the BOJ ended its five-year-old quantitative monetary easing framework of flooding the financial system with excess cash.

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