Japanese banks shares slid by the most in three years, rattled by the Bank of Japan’s decision to maintain its easy-money policy and concerns over the health of a US tech lender.
(Bloomberg) — Japanese banks shares slid by the most in three years, rattled by the Bank of Japan’s decision to maintain its easy-money policy and concerns over the health of a US tech lender.
The Topix Banks Index tumbled 5.4%, the most since March 2020. Mitsubishi UFJ Financial Group Inc. fell 6.1%, also the most in three years. Peers Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. dropped about 5% each.
Asian financials had opened the day lower following a rout in U.S. bank shares after SVB Financial Group took steps to shore up its capital position, stoking concern that soaring interest rates are eroding balance sheets across the financial industry.
Japanese bank stocks accelerated declines after the BOJ’s decision not to take action spooked investors who had positioned for a potential surprise from Haruhiko Kuroda’s last meeting as governor. The yen weakened and Japanese bond yields fell.
Tomoaki Kawasaki, a senior analyst at Iwaicosmo Securities Co. Ltd, said bank investors were likely selling to take profit after the recent run up in bank shares, when it was clear that there isn’t a change in policy.
Financial shares had climbed after the BOJ’s surprise move in December to tweak its yield curve control, which some saw as indicating the possible start of monetary tightening. Continued easing for now means banks have to live with the ultra-low interest rates that have hurt their profits for years.
(Adds background on bank share gains since BOJ’s December surprise in last paragraph, and chart)
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