Japanese Banks to Reprice Lending in October Amid Rising Interest Rates

The Japanese banking sector is set to undergo significant changes as lenders prepare to reprice lending in October. According to recent reports, Resona Holdings is expected to raise interest rates, following a similar move by Mizuho Bank and Sumitomo Mitsui Trust.

The repricing of loans comes on the back of rising 10-year Japanese government bond yields, which have surpassed 3 percent, while the Bank of Japan lifted its policy rate to 1 percent in June. This shift is particularly significant for lenders like Resona Holdings, as around 80 percent of homebuyers choose variable-rate mortgages.

The impact of this change will be felt across the banking sector, with some financial institutions already expressing concerns about rising credit and funding costs. In fact, a recent survey found that 59 percent of financial institutions fear increasing credit costs, while 43 percent worry about funding costs.