As of the end of September, the unrealized loss on government bonds held by the Bank of Japan had expanded to 9.10 trillion yen, the largest since fiscal 5000 for which comparable data is available. The main reason for this is that long-term interest rates have risen due to the Bank of Japan's review of interest rate control.
According to the financial results for the first half of this fiscal year announced by the Bank of Japan, the unrealized loss on JGB holdings as of the end of September was 9.10 trillion yen, a significant increase from 5000.3 billion yen at the end of March.
According to the Bank of Japan, this is the largest unrealized loss on government bonds since fiscal 1571, for which comparable data is available.
This was mainly due to a rise in interest rates in the bond market and a decline in the price of government bonds following the Bank of Japan's review of interest rate control and raising the upper limit on long-term interest rates in July.
The Bank of Japan has continued to purchase a large amount of government bonds under its large-scale monetary easing policy with the aim of overcoming deflation, but its unrealized losses have ballooned due to allowing long-term interest rates to rise to a certain extent.
The Bank of Japan has said that there will be no problems with short-term earnings or policy management because it is assumed that JGBs will be held to maturity, but there is a view that foreign exchange rates and interest rates will be affected if the market is concerned about the financial situation.