BOJ to revise Flow of Funds Accounts data
The Bank of Japan will retroactively revise data for its Flow of Funds Accounts (FFA) in June 2026. This update, covering data from the first quarter of 2005 onward, reflects new source data, institutional changes, and refined estimation methods.
Refining securities holdings data
The Bank of Japan is refining estimates for security-associated items held by 'securities companies' by directly capturing sub-item amounts using additional source data.
Previously, sub-item amounts were estimated using distribution ratios applied to total outstanding figures.
This revision will lead to significant adjustments: 'central government securities and FILP bonds' and 'outward investments in securities' on the asset side of 'securities companies' will be revised downward.
Conversely, 'time and savings deposits,' 'treasury discount bills,' and 'listed shares' will be revised upward for these entities.
Correspondingly, 'central government securities and FILP bonds' (assets) of 'domestically licensed banks' and 'outward investments in securities' (assets) of 'private nonfinancial corporations' will be revised upward.
Meanwhile, 'treasury discount bills' (assets) of 'domestically licensed banks' and 'time and savings deposits' (assets) of 'private nonfinancial corporations' will be revised downward.
These changes reflect a more granular and accurate assessment of securities holdings across various financial sectors.
Adjusting repurchase agreements
The Bank of Japan will refine estimates for 'repurchase agreements and securities lending transactions' across several sectors, including investment trusts and private nonfinancial corporations, by using additional source data.
These figures were previously estimated based on statistics for sectors lacking detailed financial data.
A significant change involves reallocating discrepancies between aggregated assets and liabilities in repurchase agreements from 'private nonfinancial corporations' to 'securities companies.'
This shift will result in upward revisions for 'bond investment trusts' assets and 'securities companies' liabilities.
Conversely, 'stock investment trusts' assets, along with both asset and liability sides of 'private nonfinancial corporations,' and 'local governments' liabilities will be revised downward.
These adjustments are designed to improve the accuracy of these complex financial transactions.
Accuracy over trend shifts
While these revisions are technically routine, they underscore the Bank of Japan's commitment to data precision in its Flow of Funds Accounts.
The detailed adjustments, though substantial in specific categories, are explicitly not expected to alter broader financial trends.
This meticulous approach ensures the reliability of underlying statistics for economic analysis, even if the immediate market impact is minimal.