This article organizes how to interpret earnings results using the 3 differentials identified in the Bank of Japan's Financial System Report. It examines how interest-rate movements affect bank earnings from the perspective of specific differences.
The Bank of Japan published the Financial System Report (October 2026 edition) on 23 October 2026, stating that its analysis is based in principle on information available through the end of September 2026. The publication date does not indicate an interest-rate decision as of the time of publication. Rather, the report examines both improvements in financial institutions' underlying earning power and an expansion of valuation losses on yen-denominated bonds.
The 3 differentials to watch in the next earnings releases are (1) the difference between interest received and interest paid, (2) the difference between bond valuation losses and reported earnings, and (3) the difference between the increase in earnings and the increase in credit costs. Observing these simultaneously over comparable periods helps clarify how the presentation of profits changes.
To track these 3 differentials in practice, the author introduces information sources including Mitsubishi UFJ's earnings highlights, courses on analyzing bank results, and books, videos and social media, and proposes tracing the information back to the original materials for verification.
The article is intended to explain how to read the materials and does not provide a trading recommendation for any specific stock. It provides guidance on how to interpret information based on primary sources at the various links.