* FSA, BOJ to conduct scenario analyses on banks, insurers
* FSA to work with Japan bourse on common green bond
* Moves follow BOJ's plan to boost funding to combat climate
TOKYO, Sept 1 (Reuters) - Japan will ramp up efforts to
promote sustainable finance such as by nurturing its green bond
market and analysing financial institutions' resiliency to
climate risks, according to the government's new regulatory
In collaboration with the central bank, the Financial
Services Agency (FSA) will conduct scenario analyses on Japan's
three mega-banks and top three non-life insurers to measure
their resilience to risks posed by climate change.
The analyses will be based on common scenarios on climate
risks and conducted as a pilot exercise through June next year,
Japan's financial regulator FSA said in its fiscal 2021
regulatory guideline released on Tuesday.
Japan will also set up a scheme to certify green bonds and
work with Japan Exchange Group - the operator of Tokyo Stock
Exchange - on a common platform that issuers and investors can
tap for information on green bonds, according to the guideline.
"It's important to create an environment where market
participants can smoothly and accurately make investment
decisions that contribute to decarbonisation," the FSA said.
The moves follow the Bank of Japan's decision in June to
boost funding for efforts to fight climate change.
"There are areas in finance where the BOJ can play a role in
addressing climate change," BOJ Deputy Governor Masazumi
Wakatabe told a news conference on Wednesday.
"Tax incentives, subsidies and rule-setting are areas that
fall under the realm of government and regulators," he said,
adding that a "division of labour" was crucial for policymakers
to deal with the broadening economic fallout from climate risks.
Japan is among the world's most disaster-prone countries and
has been hugely affected by climate change, with floods causing
many casualties each year.
Prime Minister Yoshihide Suga last year set a goal to make
the country carbon neutral by 2050, bringing it more in line
with other countries as global attention to climate change
Japan's green bond market is growing but still small,
accounting for about 775 billion yen ($7 billion) of the world's
$300 billion market for such assets.
($1 = 110.1000 yen)
(Reporting by Leika Kihara; Editing by Christopher Cushing and