Bad Sushi! Japanese Banks Miserable Q1 Thanks To Negative Interest Rates (US Has REAL Negative 10Y Yields)

Jon Banking, Economy, Market Commentary

Bank of Japan’s decision to go full negative on interest rates is causing serious problems for their banks.
The Japanese sovereign bond curve lies considerably below the US Treasury yield curve, harming the yield rate on both US and Japanese bank investments (loan rates).
As witnessed by Japanese banks poor performance in Q1.
Bloomberg – Japanese banks have been predicting a severe impact from negative interest rates, and this earnings season is proving them right. Net income fell at 42 of the 54 banks that reported fiscal first-quarter results so far as loan profitability shrank. ‘There is no change in the downward pressure on domestic loan rates,’ Toyoki Sameshima, a Tokyo-based senior analyst at BNP Paribas SA, wrote in a note.

This post was published at Wall Street Examiner on August 8, 2016.