The Bank of Japan has published a semi-annual report analyzing the current state and risks of Japan's financial system.
As the effects of the new coronavirus continue to prolong, we warn that the number of small and medium-sized enterprises that cannot repay their debts in the "face-to-face service industry" such as eating and drinking and lodging may increase significantly.
The semi-annual "Financial System Report" released by the Bank of Japan on the 20th states that the Japanese financial system "maintains stability as a whole" and provides financial data of more than 700,000 SMEs. We are analyzing the risks that we should be aware of in the future, such as by using them.
According to this, while government support measures such as benefits and real interest-free / unsecured loans have a certain effect on supporting the management of companies, in the "face-to-face service industry" such as eating and drinking and accommodation, profits are generated. Since it is expected that the harshness will remain, it warns that the number of small and medium-sized enterprises that will be unable to repay their debts will increase significantly from this year.
For this reason, he points out that it is becoming more important for financial institutions to grasp the situation of their business partners in more detail, and encourages each financial institution to manage risks appropriately.
Based on the contents of this report, the Bank of Japan will check the financial system in addition to the domestic economy and price situation at the monetary policy meeting to be held next week.