Does QQE expose the Bank of Japan to large losses?

A sharp rise in interest rates could result in large losses for the Bank of Japan if it were ever to sell its huge stock of government bonds. But the Bank is keeping a lid on bond yields and will continue buying rather than selling bonds. And even if QQE succeeds eventually and the Bank loosens its grip on yields, we believe that it would have the tools to tighten policy without incurring enormous costs.