The Bank of Japan said Thursday it posted a net loss of 112.6 billion yen in the six months to Sept. 30, marking a sharp reversal from the profit of 288.5 billion yen logged a year earlier.
The BOJ attributed the loss primarily to heavy valuation losses on its Japanese government bond holdings.
It is the first time in 31 1/2 years that the central bank has plunged into the red and the second time it has incurred a net loss, bank officials said.
The BOJ booked hefty losses of 793.7 billion yen related to long-term government bond holdings in the wake of interest rate hikes.
Of those losses, 759.9 billion yen were valuation losses.
The bank said it posted an operating loss of 195.8 billion yen in the first half, compared with a profit of 288.1 billion yen a year ago, with operating expenses surging 378.2 billion yen to 1.1 trillion yen.
It also blamed the red ink on a 105.8 billion yen decrease in operating income to 908.3 billion yen.
The BOJ said its capital adequacy ratio stood at 7.38 percent as of Sept. 30, down from 7.62 percent as of March 31.
Misgivings at BOJ
Three of the nine members of the Bank of Japan Policy Board dissented when the panel decided to ease monetary policy further at its Oct. 9-10 meeting, according to minutes released Thursday.
The three members were Kazuo Ueda, Teizo Taya and Miyako Suda, who all saw no need to take additional credit-easing steps under the current economic environment, the minutes show.
The BOJ policy-setting panel decided by a majority vote to expand the target for the outstanding balance of deposits in current accounts held by private financial institutions at the central bank to between 27 trillion yen and 32 trillion yen from 27 trillion yen and 30 trillion yen.