BOJ sets aside maximum provisions for bond transactions, Nikkei reports

(Reuters) -The Bank of Japan has set aside the maximum provision for losses on bond transactions, the Nikkei reported on Monday.

For fiscal 2024, BOJ raised the level of provisions to 100% for the first time, signaling that the central bank expects higher interest payments to financial institutions to impact its capital base, the newspaper reported.

Japan’s central bank kept short-term interest rates steady at 0.5% in its May meeting, with pressures mounting to keep hiking borrowing costs.

BOJ did not immediately respond to a Reuters request for comment.

(Reporting by Sneha Kumar in Bengaluru; Editing by Nia Williams)