Japan Banks Resist Pressure to Invest in Defense Industry

Japanese banks are struggling to meet the government's call for cooperation in providing investments and loans to the defense industry. In response, the Development Bank of Japan has relaxed its investment rules, abolishing restrictions on investing in arms manufacturers.

Megabank officials have said that investments and loans will be decided on a 'case-by-case' basis, but commercial financial institutions remain cautious due to concerns over a possible deterioration in their corporate image and the impact on their overseas businesses, especially in China.

Defense Minister Shinjiro Koizumi had called for more investments and loans to the defense industry at a discussion session with the Japanese Bankers Association in July. He emphasized that it is vital for the defense industry to receive investments and loans at appropriate times to continue business and achieve growth.