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Silicon Valley Bank (SVB)
AsiaEast Asia

Japan bank shares plunge as Asia braces for fallout from SVB collapse

  • Japanese banking shares on Tuesday tumbled the most since the onset of the Covid-19 pandemic
  • It came as Asian equities extended declines as investors tried to gauge the fallout from the collapse of SVB and fellow US lender Signature Bank

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A pedestrian walks past an electronic quotation board displaying a graph of the Tokyo Stock Exchange’s Nikkei 225 index. The Nikkei share average was down more than 2 per cent on Tuesday. Photo: AFP
Reuters
Japanese banking on Tuesday tumbled the most since the onset of the Covid-19 pandemic, dragging the Nikkei share average down more than 2 per cent, as investors tried to gauge the fallout from the collapse of two US lenders.
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Policymakers played down the risk of Japan’s economy taking a hit, with Economy Minister Shigeyuki Goto saying at a regular news conference that the government was closely watching for any potential fallout.
Finance Minister Shunichi Suzuki echoed the view, saying he saw the possibility of Japan’s financial system being jolted by Silicon Valley Bank’s collapse as small.
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“We’re seeing some risk-aversive moves in the market. But Japan’s financial system is stable,” Suzuki said at a separate news conference.

The Silicon Valley Bank logo is seen through a rain covered window in front of the bank’s California headquarters this month. Photo: Getty Images/TNS
The Silicon Valley Bank logo is seen through a rain covered window in front of the bank’s California headquarters this month. Photo: Getty Images/TNS

Yields on Japanese government bonds plunged to multi-month lows, with 10-year yields sliding to 0.24 per cent for the first time since last November – as they tracked US peers amid a global flight to quality. Yield curves have flattened, putting additional weight on banks by cutting the outlook for lending profit.

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