Bank of Japan Gov. Masaru Hayami sent a strong message to domestic financial institutions Tuesday, calling on them to make greater efforts to disclose information regarding their bad loans and effectively take steps to dispose them.
The move was also seen as an indirect effort to improve confidence in the economy in markets both at home and abroad.
A lack of confidence is sometimes cited as a factor behind the yen's recent nosedive. "While it is totally up to the financial institutions to decide the extent to which they disclose the contents of their internal assessments (of their nonperforming loans), the Bank of Japan hopes that disclosure progresses and leads to the recovery of market trust in our financial system," the BOJ head said in a statement.