The Bank of Japan has overpaid on domestic air travel expenses claimed by many of the 2,150 employees at its head and branch offices since fiscal 1999, officials admitted Thursday after the Board of Audit reportedly ordered it to correct the practice.

The overpayment occurred when BOJ employees used advance allowances for full-price air fares to buy discount fares instead and pocket the difference, the officials said, adding that this runs counter to the central bank's bylaws, which stipulate that only actual travel expenses are reimbursed when BOJ officials travel on business by air.

The BOJ "takes seriously the fact that inappropriate payments have been made, and would like to deeply apologize for causing a public stir," Tomohisa Takeda, adviser to the governor for management strategy, budget and accounting, told reporters at BOJ headquarters in Tokyo.