Welcome to the Reuters.com BETA. Read our Editor's note on how we're helping professionals make smart decisions.
Skip to main content


Japanese bank risk appetite rises late

3 minute read

Mitsubishi UFJ Financial Group, Inc. (MUFG) President and Group CEO Hironori Kamezawa speaks during an interview with Reuters in Tokyo, Japan July 9, 2020. Picture taken July 9, 2020. REUTERS/Issei Kato

HONG KONG, June 11 (Reuters Breakingviews) - If anyone knows how to deploy excess deposits, it should be Japanese banks, who have wrestled for decades with cash hoards and ultra-low rates. Mitsubishi UFJ Financial (8306.T) is now planning a $9 billion fund to invest in credit, stocks and other assets in its latest effort to bolster returns, Bloomberg reports. Collectively the Japanese system is sitting on almost $3 trillion in surplus funds, even with negative domestic benchmark interest rates.

MUFG has branched out before. In 2019 it bought a $6 billion-plus book of aviation loans from Germany’s DZ Bank, plus took control of Indonesia’s Bank Danamon for $3.5 billion. Unfortunately the latter deal prompted a $1.9 billion writedown almost immediately. The same year rival Mizuho Financial (8411.T) booked $1.6 billion in losses from its securities holdings, including foreign bonds. Now MUFG is preparing to invest at a time when many asset prices have been heated by stimulus. With higher returns come higher risks. (By Jennifer Hughes)

On Twitter http://twitter.com/breakingviews

Capital Calls - More concise insights on global finance:

Fed’s inflation-messaging dilemma worsens read more

Ad spending surge makes Big Tech bigger read more

Tech IPO scepticism spreads to France read more

Grab spotlights SPAC deal growth forecast folly read more

GEO jumps the prison wall read more

SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: <a href="http://bit.ly/BVsubscribe" target="_blank">http://bit.ly/BVsubscribe</a> | Editing by Pete Sweeney and Katrina Hamlin

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

More from Reuters