Japan Banks’ $3 Trillion Dilemma Puts Focus Back on Riskier Bets
- Loan-deposit ratio has widened to biggest gap on record
- Mitsubishi UFJ Financial is considering alternative assets
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Japanese banks are in a bind -- again.
Sitting on record levels of excess cash, lenders are turning to riskier investments that need complex foreign exchange hedges, such as U.S. Treasuries, to make a return on deposits that ballooned during the pandemic. Many will be seeking to avoid past mistakes.