Business & Economy

Major Japanese banks suffer losses over fear of SVB exposure

Tokyo, Mar 14 (EFE).- Three of the largest Japanese banks, Mitsubishi UFJ, Mizuho and Sumitomo Mitsui Financial Group, recorded significant losses Tuesday along with other Japanese financial entities in the first half of trading on the Tokyo Stock Exchange due to fears of their exposure to the bankruptcy of Silicon Valley Bank (SVB).

Tokyo’s main stock index, the Nikkei, fell 1.91 percent by mid-session, recovering from a 2.6 percent drop in the morning, driven by nervousness in the banking sector.

The First Bank of Toyama plummeted 8.76 percent in the mid-session, although it remains to be known if it has ties to SVB or the also bankrupt Signature Bank.

ACCESS, a company specializing in Internet services, posted the fourth-largest drop by mid-morning, of 8.67 percent, after revealing that its US subsidiary IP Infusion has a capital deposit of about $11.6 million in SVB.

The Mitsubishi UFJ financial group was the most traded company and its value fell 6.04 percent, closely followed by its competitor Sumitomo Mitsui, which lost 6.03 percent.

The asset management conglomerate Sumitomo Mitsui Trust – independent of the financial group of the same name, but with economic ties to it – with a stake of around two percent in SVB, fell by 4.17 percent.

Mizuho, another major bank in Japan, dropped 5.76 percent in the stock market.

The technology group Softbank, with the highest market capitalization in Tokyo, was also among the most traded companies and lost 3.67 percent in the first session of trading.

Tokyo’s financial markets have responded sharply to the weekend’s bankruptcy announcement by the two US financial institutions, bringing back memories of the collapse of Lehman Brothers in 2008.

Japanese Finance Minister Shunichi Suzuki stressed Tuesday that the authorities believed the possibility of SVB bankruptcy affecting the Japanese financial system was low and that US authorities were taking action. EFE


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