Japan's property market shows signs of overheating -BOJ

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Japan's property market shows signs of overheating -BOJ

© Reuters. FILE PHOTO: A construction site is seen at a residential area in Tokyo, Japan, August 21, 2016. REUTERS/Kim Kyung-Hoon/File photoTOKYO - Japan's property market is showing signs of overheating because of an inflow of foreign money and growing investments by major real estate developers, the central bank warned on Friday.

In a heat map of economy sectors which are running hot, the ratio of investment by real estate firms to gross domestic product turned"red", a signal that the property market was overheating, the central bank said. On Japan's banking system, the report said it remained stable on the whole. But it called for vigilance by financial institutions against the risk of a prolonged period of stress as global central banks continue to tighten monetary policy.

For now, Japanese financial institutions' credit risk from foreign loans remain low, despite tightening global financial conditions, thanks in part to their efforts to rebalance their portfolios, the bank said in its report.

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