BOJ Suzuki warns recession could hurt banks via rising credit costs

Bank of Japan new policy board member Hitoshi Suzuki attends a news conference in Tokyo
FILE PHOTO: Bank of Japan (BOJ) new policy board member Hitoshi Suzuki attends a news conference at BOJ headquarters in Tokyo, Japan July 25, 2017. REUTERS/Issei Kato

February 28, 2019

MITO, Japan (Reuters) – Bank of Japan board member Hitoshi Suzuki said on Thursday the country’s financial institutions could see their profits hurt by rising credit costs if the economy slips into recession.

“Japan’s banking system remains stable. But we must continue to scrutinize how financial institutions, including regional ones, are doing business and what risks they are taking,” Suzuki said in a speech to business leaders in Mito, eastern Japan.

Under a policy dubbed yield curve control (YCC), the BOJ aims to guide short-term interest rates at minus 0.1 percent and long-term rates around zero percent.

(Reporting by Leika Kihara; Editing by Chang-Ran Kim)

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