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CHAPTER 16 FINANCE AND INSURANCE
This chapter contains finance, public and corporate bonds, stocks and insurance.
The section of finance contains statistics on deposit and lending by financial institutions and various kinds of interest rates. The main sources of data are "Financial and Economic Statistics Monthly", "Bank of Japan Statistics", and statistics released at the website of the Bank of Japan.
The section of public and corporate bonds and stocks contains statistics on the flotation of national government bonds, public and corporate bonds and foreign bonds as well as statistics on security exchanges. The main data sources are the statistics presented on the websites of Tokyo Stock Exchange, Inc. and Japan Securities Dealers Association.
The section of insurance contains statistics on life and non-life insurance as well as the disaster insurance for agriculture, forestry and fishery business. The main data source is "Summary of Life Insurance Business" by the Life Insurance Association of Japan. Further, for currency and flow of funds, see "4 Currency and Flow of Funds", for social insurance and pension, see "23 Social Securities", and for suspension of business with banks, see "7 Business Activities".
Financial statistics
Principal financial statistics presented in this Yearbook are obtained from "Financial and Economic Statistics Monthly", "Bank of Japan Statistics", and the website of the Bank of Japan in which the Bank compiles main economic statistics with priority given to financial statistics prepared by the Bank.
Basic interest rates of the Bank of Japan
The interest rates of the Bank of Japan refers to the basic discount rate and the basic loan rate (previously indicated as official discount rates), which are representative rates among various interest rates and are determined by the decision of the Policy Board.
Assets and liabilities of domestically licensed banks
These statistics have been compiled since 1873 and are ones of the oldest financial statistics. For a time series analysis of those statistics, considerations should be given to changes in the coverage of financial institutions and the change in business types. Domestically licensed banks refer to banks which are established and licensed under the Japanese legislation (excluding the Bank of Japan and government affiliated financial institutions).
Loans and discounts outstanding by sector (major industries, etc.)
The classification of industry follows the Japan Standard Industrial Classification, and is determined by the main industry (the industry occupying largest weight in the total sales during past one year) of the borrower. Equipment funds refer to funds invested in tangible fixed assets whose durable life exceeds one year. The statistics have been compiled since 1940.
Loans to individuals
- For purchase of houses
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Loans with installment repayment to individuals for the purchase of houses (excluding those for business purpose), including building a new house, reforming, and purchase of housing lot. "Installment" here means that repayment is made in three or more installments within two months or longer.
- For purchase of consumer goods and services
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Loans (excluding those for business purposes) to individuals for the purchase of consumer goods or services (including loans for nonspecified consumer expenses). Sum of the loans with installment repayment and the loans by cards (card-loan (overdraft), emergency-loan, card-cashing).
Tokyo Stock Price Index
Data are derived from the statistics on the website of the Tokyo Stock Exchange, Inc., which are based on the deals of listed stocks.
The index covers all stocks listed on the First Section of the Tokyo Stock Exchange, and are calculated by dividing the current total market value (obtained by multiplying the number of shares of listed stocks and their prices) by the total market value at the base date (4 January 1968). While the index reflect the price movement of listed stocks as a whole, there is a tendency for the index not to reflect sensitively the movement of stock prices, because the number of shares of each listed stock is adopted as the index weight, and that larger weights are allotted to large-capital stocks whose prices move relatively within a narrow range.
In Japan, there are such stock exchanges as Tokyo Stock Exchange, Osaka Stock Exchange, Nagoya Stock Exchange, Fukuoka Stock Exchange and Sapporo Stock Exchange.
Nikkei Stock Average
The Nikkei 225 Stock Average is calculated by the Nikkei Inc. using current or closing prices or quotations, of 225 representative stocks listed on the Tokyo Stock Exchange. It is adjusted for price declines following new issues of the companies' shares, in order to maintain continuity.
Life and non-life insurance
The statistics are based annual reports such as "General Condition of Life Insurance" by the Life Insurance Association and "The Statistics of Japanese Non-Life Insurance Business" by the Insurance Research Institute. The life insurance statistics cover domestic life insurance companies (40 companies as of the end of March 2014, including Japan Post Insurance Co., Ltd.) and foreign companies (3 companies), the non-life insurance statistics cover domestic insurance companies (28companies , fiscal 2013) and foreign companies (21 , companies fiscal 2007).
Compensation for agricultural damages
Data are based on "Statistics of Mutual Relief Programmes for Agricultural Damages Compensation" compiled annually by the Ministry of Agriculture, Forestry and Fisheries. This compensation system is a mutual relief system which makes up the loss due to contingent agricultural disaster, under the Act of Compensation for Agricultural Damages. The system is comprised of mutual relief programmes carried out by the Agricultural Mutual Relief Associations of shi (cities), machi (towns) or mura (villages) and insurance programmes by the Prefectural Federation of Agricultural Relief Associations and reinsurance programmes by the government. In addition to the farm crops mutual relief programmes, there are mutual relief programmes for livestock, pomiculture, field crops and horticultural facilities, and voluntary mutual aid programmes. The statistics mentioned above are prepared by each mutual aid programme.
Government-managed forest insurance
The source of data is "Statistics on the Government-Managed Forest Insurance" compiled every year by the Forestry Agency. This insurance system was a non-life insurance operated directly by the government for compensation for the damage to public or private artificial forests caused by fires and meteorological causes pursuant to the Government-Managed Forest Insurance Act.
Fishing boat insurance
Data are based on "Statistical Tables on Fishing Boat Insurance" compiled annually by the Fisheries Agency. The fishing boat insurance system refers to a system of mutual insurance under the Act of Compensation for Fishing Boat Losses, etc. for the purpose of the repairing damages due to contingent accidents to fishing boats and of the replacement at an appropriate time. The system is composed of the fishing boat insurance operated by the Fishing Boat Insurance Associations which are mutual organisations set up by the owners of fishing boats, the protection and indemnity insurance of fishing boats operated by the Federation of Fishing Boats Insurance Cooperatives, and the fishing boat reinsurance operated by the government. The fishing boat insurance is either classified as ordinary insurance or special insurance, the former of which is further classified into ordinary damage insurance and maturity insurance. The nucleus of the insurance is the ordinary damage insurance.
