BOJ produces estimates on how future rate hikes affect earnings
The Bank of Japan released for the first time estimates on how future interest rate hikes could affect its earnings, which showed it will briefly suffer red ink of up to $13 billion if short-term borrowing costs were to go up to 2%. The estimates, disclosed on Thursday in a research paper, underscore the BOJ's resolve to keep pushing up short-term interest rates - now at 0.25% - to levels deemed neutral to the economy in coming years. The BOJ conducted estimates based on several scenarios, including one in which short-term rates move up to around 1-2% in the course of several years, while the spread between short- and long-term rates move between 0.25% point and 0.75% point.
