Japan's central bank has suggested that the recent failures of two US banks will have a limited impact on the country's financial system.
The Bank of Japan released its "On-Site Examination Policy for Fiscal 2023," a plan to investigate financial institutions' business conditions, on Tuesday.
Earlier this month, in the United States, Silicon Valley Bank and Signature Bank have collapsed after suffering losses on bonds due to rapid rate hikes.
Regarding the bankruptcy of two US banks, Japan's central bank said that Japanese financial institutions have adequate capital levels, with only a small amount of assets at risk.
But the BOJ indicated that it will carefully monitor the risk situation, including the impact of the failed US banks, as some financial institutions are actively engaged in overseas business and investments.
The BOJ says it will fully resume on-site examinations of financial institutions in the new fiscal year starting in April. The inspections have been put on hold due to the coronavirus pandemic.