The Bank of Japan would suffer 2.3 trillion yen ($24.6 billion) of unrealized losses if long-term rates rise by one percentage point, Deputy Governor Kiyohiko Nishimura said in parliament on Thursday.
Japanese government yields have hit multi-year lows recently on monetary easing expectations, but there are some concerns of yields reversing course if the government continues issuing debt and neglects fiscal discipline.
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The BOJ is a major holder of government debt, which it buys to support its super easy monetary policy.
($1 = 93.5200 Japanese yen)
(Reporting by Kaori Kaneko; Editing by Shinichi Saoshiro)