/www.bloomberg.com/ By Mayumi Otsuma
Tokyo, Feb. 7 (Bloomberg) -- The value of the central bank's investments in Japanese government bonds would fall by 1 trillion yen ($8.4 billion) if yields rose by 1 percentage point, Governor Masaru Hayami said.
``We have taken appropriate steps to counter the risk of bond price changes, and we have set aside sufficient reserves,'' Hayami told a parliamentary committee. ``Currently, there is no concern about the financial health of the central bank.''
The potential loss was calculated on the basis of the bank's holdings of Japanese government bonds as of last September, Hayami said. The bank has set aside 5.1 trillion yen in reserves, he added.
At the end of December, the bank had 127.1 trillion in assets, of which about two-thirds, or 84.5 trillion yen, were government securities.
The yield on No. 246 bond, which carries a 0.8 percent coupon and matures in 2012, fell 2 basis points to 0.835 percent at 1:26 p.m. in Tokyo. A basis point is 0.01 percentage point
Prime Minister Junichiro Koizumi is preparing to name a successor to Hayami, whose five-year term as central bank governor ends on March 19.
Koizumi, speaking at the same committee hearing, repeated that the next governor would be ``a person who can aggressively fight deflation.''
Consumer prices in Japan haven't risen in more than four years, hurting corporate profits and economic growth.