Financial Services Minister Hakuo Yanagisawa on Tuesday welcomed moves by major banks to take loan-loss charges topping 6 trillion yen for the 2001 business year.

"That's a pretty big amount," he told reporters, noting the banks are now becoming more serious in preparation for a possible deterioration in their loan portfolios and for stricter inspections by the Financial Services Agency.

In their interim earnings reports released Thursday and Monday, 14 major banks said they would book a total of 6.44 trillion yen in loan-loss charges for the year to March 31 to clean up bad loans.

The amount is more than three times what they initially planned.

Although the banks will be forced to dispose of more nonperforming loans, the government's policy of getting the banks to solve the bad-debt problem within two to three years will remain in place, Yanagisawa said.

"The FSA has made its estimates (on bad debts) on a very severe assumption . . . our policy is still in place," Yanagisawa said.

Fitch lowers ratings

LONDON (Kyodo) International credit-rating agency Fitch Ltd. said Monday it has lowered its credit ratings on major Japanese banks, including Mizuho Financial Group, Mitsubishi-Tokyo Financial Group, UFJ Group and Sumitomo Mitsui Banking Corp.

It also indicated that further downgrades are possible.

Fitch announced the downgrade after cutting Japan's sovereign ratings to AA from AA plus earlier in the day.

"The agency judges that the capacity of the government to support the banks, in the event of need, is weakening due to the country's poor economic performance and deteriorating public finances," the agency said.

Within MTFG, long-term credit ratings for Bank of Tokyo-Mitsubishi and Mitsubishi Trust & Banking Corporation were lowered from A plus to A.

Within the Mizuho group, credit ratings for Dai-Ichi Kangyo Bank, Fuji Bank, Industrial Bank of Japan, Mizuho Trust and Mizuho Holdings were lowered from A to A minus, while Yasuda Trust was lowered from A minus to BBB plus.

Sanwa Bank, Tokai Bank and Toyo Trust & Banking -- banks in the UFJ Group -- were lowered from A to A minus.

Asahi Bank was downgraded from BBB plus to BBB minus, while the long-term rating outlook was listed as stable.

The long-term rating for Bank of Yokohama was lowered from BBB plus to BBB.