TOKYO : A weak yen and booming stocks brought record profits to the Bank of Japan in the fiscal year that ended in March, dispelling concerns its huge balance sheet exposes it to unwelcome market risk - at least for now.
The balance of the central bank's government bond holdings shrank 1.1 per cent in fiscal 2021 from year-earlier levels, marking the first fall in 13 years, as huge amounts of short-term bills it gobbled up last year reached maturity, its earnings report showed on Friday.
Still, the total balance of government bonds stood at 526.2 trillion yen ($4.1 trillion), roughly the size of Japan's economy.
The BOJ posted a record recurring profit of 2.42 trillion yen in fiscal 2021, up 442.1 billion yen from the previous year, as the weak yen inflated the value of its foreign assets. It also enjoyed an increase in dividends from its huge holdings of exchange-traded funds (ETF), the data showed.
As a result, the BOJ was able to pay 1.26 trilion yen to state coffers, which will be part of funds the government can tap to fund its huge fiscal spending, the data showed.
($1 = 127.0500 yen)