Japan’s troubled regional banks are plunging into riskier corners of the credit markets, in a struggle to survive ultra-low interest rates and an industry shakeout.
As debt yields tumble globally, the lenders are also facing weak business at home, where a shrinking population is hitting the outlying areas hardest. That’s prompting authorities to push for consolidation. Desperate to avoid that fate, the banks are shedding their traditional conservatism, fueling questions about their ability to manage riskier holdings including foreign assets.