Japanese Bank Stocks Climb as Bond Yields Surge on Rate Hike Bets

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Summary · why it matters

Major Japanese bank stocks rose on Friday as a surge in government bond yields and expectations of more interest rate hikes pointed to improving margins for local lenders. Mizuho Financial, Sumitomo Mitsui Financial, Mitsubishi UFJ Financial, Japan Post Bank, and Resona jumped between 3.2% and 4.5%, underpinning an over 1% rise in the Nikkei 225. Japanese government bond yields surged this week, with the 10-year rate hitting a 30-year high as rising oil prices fueled concerns over rising inflation and interest rates. Bets on more Bank of Japan rate hikes also underpinned Japanese banks, after the BOJ raised rates by 25 basis points last week and warned of more such moves in the coming months. Japan Post was an outperformer in the group, given that the lender's massive government bond book allows it to earn more on reinvesting at higher yields.

Impact on assets 7

Financials▲
Japan Post Bank Co., Ltd.
7182
▲ PositiveMonetaryrelevance

Japan Post Bank outperformed as its massive government bond book earns more reinvesting at higher yields.

Aging Population▲
Others▲
％Japan Government Bond 10Y
JP-10Y
▲ PositiveMonetaryrelevance

JGB 10-year yield surged to a 30-year high on BOJ rate-hike bets and oil-driven inflation concerns, pushing the yield up.