BOJ Sees Debt-Servicing Capacity Increasingly Vary among Firms

Economy Politics

Tokyo, April 20 (Jiji Press)--Debt-servicing capacity could increasingly vary among industries and companies in Japan as the COVID-19 pandemic is prolonged, the Bank of Japan said in a semiannual report on Tuesday.

In the Financial System Report, the BOJ said the country's financial system "has been maintaining stability on the whole, while COVID-19 continues to have a significant impact on economic and financial activity at home and abroad."

In fiscal 2020, which ended last month, small firms' default risks were greatly reduced by an increase in their cash holdings, on the back of the government's funding support amid the pandemic, according to the BOJ.

Default risks are expected to rise mildly in fiscal 2023, due to higher interest payments, it said.

The BOJ warned of possible delayed improvements in business conditions for some firms as "the impact of COVID-19 significantly varies across industries and firms."

[Copyright The Jiji Press, Ltd.]

Jiji Press