After a decade of expansion, the US economy entered recession in March 2001. What characterizes the latest recession more than anything else is the fact that corporate sector demand, as represented by capital investment, is undergoing a deeper correction than seen in past recessions, while...

In August 2013, the Financial Markets Department of the Bank of Japan (the Bank) conducted the fourth Tokyo Money Market Survey (August 2013) to recognize developments in the Japanese money market. Since 2008, this series of surveys had been conducted every other year until 2012. However, to...

Financial institutions conduct asset liability management (ALM) in three steps. The first step is to gauge the degree of risks inherent in their assets and liabilities, including off-balance transactions. The second step is to reduce funding costs as well as streamline investment. The third step...

In fiscal 2003 (April 2003-March 2004), approximately 90 percent of Japanese banks posted positive net income, due to a decline in losses from the disposal of nonperforming loans (NPLs), i.e., credit costs, and to an improvement in stock-related gains/losses. The aggregate figures for both major...

Throughout fiscal 2006, the Bank of Japan conducted money market operations with the uncollateralized overnight call rate as the operating target. Between March 2001 and March 2006, the Bank adopted the so-called "quantitative easing policy" whereby it conducted money market operations with the...

Hedge funds in Japan have recently been attracting more capital from institutional investors, including financial institutions. This paper highlights the relevant risk management issues for hedge fund investments. An investor investing in hedge funds requires a different risk management...

The Ministry of Finance and the Bank of Japan will implement a major revision of balance of payments related statistics, mainly with the aim of achieving conformity with the sixth edition of the Balance of Payments and International Investment Position Manual published by the International...

Net income for fiscal 2012 increased by around 30 percent at major banks and around 10 percent at regional banks relative to fiscal 2011, mainly because large gains on sales of bonds were recorded and tax-related expenses decreased. However, net interest income on loans and securities holdings,...

Hedge funds are becoming increasingly prominent in global financial markets. Although hedge funds and investment trusts are both forms of pooled investment vehicles, hedge funds are characterized by greater freedom for investment managers in terms of investment strategies. This is because hedge...

During fiscal 2012 (April 1, 2012 to March 31, 2013), the Bank of Japan continued to pursue powerful monetary easing through such measures as the virtually zero interest rate policy and purchases of financial assets.