BoJ: Japan's financial system maintains stability on the whole

Here are key findings from the Bank of Japan’s (BoJ) Financial System Report

Japanese banks have sufficient capital bases, stable funding bases to withstand various stress situations.

Necessary to carefully monitor impact on the financial system of geopolitical risks particularly regarding situation in the Middle East.

Lending by three major banks to the Middle East remains limited but impact of increases in crude oil prices could be different across regions and industries.

Non-investment-grade firms, in particular, could be affected, default probabilities tend to rise in industries other than energy sector.

Firms' commodity procurement costs could be elevated, and effects through supply chains could emerge.

Necessary to pay close attention to possibility that this could have an impact on firms' financial positions.