Financial System Report (April 2026): the financial system maintains overall stabilityThe Bank of Japan's "health check of the financial system" (April 2026)
On April 21, 2026 the Bank of Japan published the Financial System Report (April 2026 issue). It assesses that Japan's financial system "maintains stability on the whole", and examines that stability as the external environment changes substantially, including the tension in the Middle East since the end of February and the activity of overseas non-bank entities.The financial system means the whole mechanism, including banks, through which money changes hands. Twice a year the Bank of Japan issues a report that is like a health check of it. In the report published on April 21, 2026, Japan's financial system was described as "maintaining stability on the whole". Points to watch, such as the situation in the Middle East and the flow of money from overseas, were also named.
- ○Applies: Japan's financial system maintains stability on the whole
- ○Applies: No major imbalances are seen in current financial activity
- ○Applies: Corporate bankruptcies and the default rate are moving sideways
- ○Applies: Financial institutions' yen interest rate risk is held low relative to capital
- ×Does not apply: Real estate related lending is growing faster than lending to all industries
- ×Does not apply: Continued attention is needed to geopolitical risks, centered on the Middle East
- (1) OutsideChanges in the outside environment, such as the Middle East situation and oil prices
- (2) LendingBank lending, and the risks in lending for real estate and to funds
- (3) RatesThe effect on companies and banks as interest rates rise
- (4) TestA stress test to see whether banks have enough capital