02073cas a2200253 a 4500 AALejournalIMF013940 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484374214 1018-5941 BD-DhAAL BD-DhAAL Arslanalp, Serkan. Outlook for Interest Rates and Japanese Banks' Risk Exposures under Abenomics / Serkan Arslanalp, Waikei Lam. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines how Japan's long-term interest rates and Japanese banks' interest rate risk exposures may evolve under Abenomics. Results from a panel regression analysis for major advanced economies shows that long-term government bond yields in Japan are determined to a large extent by growth and inflation outlook, fiscal conditions, demography, and the investor base of government securities. A further deterioration of fiscal conditions would push up long-term rates by about 2 percentage points over the medium term, but the rise is partly offset by higher demand for safe assets amid population aging and increased purchases by the Bank of Japan. At the same time, illustrative scenarios suggest the interest rate risk exposure of Japanese banks could decline substantially over the next two years. However, if structural and fiscal reforms are incomplete, both long-tem yields and interest-risk exposures of Japanese banks could increase over the medium term. Mode of access: Internet Lam, Waikei. IMF Working Papers; Working Paper ; No. 2013/213 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/213/001.2013.issue-213-en.xml IMF e-Library