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As interest rates rise, the Bank of Japan will have to pay more on deposits, resulting in a mismatch between what it pays out and how much it receives on bonds it holds.
BUSINESS / Economy / FOCUS
The Bank of Japan’s $3 trillion problem
By Kazuaki Nagata
As interest rates rise and the deposits it holds become far more expensive, the central bank could end up becoming unprofitable.
As interest rates rise, the Bank of Japan will have to pay more on deposits, resulting in a mismatch between what it pays out and how much it receives on bonds it holds.