Japanese financial firms rally after comments from Bank of Japan Governor Kazuo Ueda suggested an end to negative interest rates is possible if policymakers become confident that prices and wages will keep going up sustainably.
(Bloomberg) — Japanese financial firms rally after comments from Bank of Japan Governor Kazuo Ueda suggested an end to negative interest rates is possible if policymakers become confident that prices and wages will keep going up sustainably.
The nation’s biggest lenders Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. all gained more than 4% on the expectation that rising interest rates would boost profits on lending. Financial firms have seen their interest income crushed by years of rock-bottom rates in Japan.
The Topix Banks gauge increased about 4.7%, the most since Dec. 21, which was one day after former BOJ Governor Haruhiko Kuroda tweaked the central bank’s yield curve control program. The index is at the highest since 2008 and was up Monday as the wider market fell.
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“We remain fairly bullish on the sector as we cannot see how we can wait for the rest of the year before BOJ decides to disband YCC,” said Amir Anvarzadeh, strategist at Asymmetric Advisors Pte. The BOJ doesn’t have the luxury of time to wait as yen could be much weaker by then, he said.
–With assistance from Aya Wagatsuma.
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