Japan's Banks Face Profit Pressure Despite Kuroda's Curve
- Lenders still face shrinking loan profitability as rates fall
- Bank profits likely to fall over time, Mizuho analyst says
Markets React to the Bank of Japan Announcement
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The Bank of Japan’s decision to engineer the perfect yield curve isn’t convincing analysts an end is in sight to falling bank earnings.
By refraining from dragging short-term interest rates further negative and pledging to keep 10-year bond yields around zero, the central bank will give lenders room to protect their razor-thin loan margins. The policy will also help them to secure interest income from their longer-dated bond holdings.