The upgrade will reduce sudden stock price fluctuations, enable participants to more easily execute trades at closing prices, and stabilise system performance.
Under a special measure to be launched in March, a bank's capital-to-asset ratio will not be reduced when it invests in a struggling peer.
The BOJ committee is soliciting entities that can begin calculating and publishing term structures based on JPY overnight index swaps as prototype rates.
For the first time, cryptocurrency exchanges will also subject to the review, the first assessment of Japan’s AML system in 11 years.
Data relating to margin transactions and short selling will be made available to testing participants to identify possible new applications of the data.
The BOJ warns of a buildup of risks from lending to “low-return borrowers”, delayed loan restructuring, and overseas exposures to leveraged loans and CLOs.
The BOJ and FSA will jointly coordinate stress tests on Japan’s three G-SIBs and four D-SIBs to assess how capital and liquidity could be affected if stocks fell and the yen spiked.
Japan's proposal to lower the notification threshold for foreign investors has passed the cabinet and could become law by early April, with exemptions for foreign FIs.
The government reportedly intends to exempt ‘portfolio investors’ from having to seek prior approval under the proposed 1% notification threshold.
Through an exchange of letters, Japan’s FSA and the EU’s SRB have agreed to cooperate to plan for and conduct orderly cross-border resolutions of banks.