Standard & Poor's Corp. has placed the long-term credit ratings of 10 major Japanese banks and the long- and short-term ratings on two trust banks under review for possible downgrade in the near future, the U.S. credit-rating agency said Wednesday.

S&P said it has placed the 10 major lenders on CreditWatch with negative implications and affirmed their short-term ratings.

The 10 banks are: the Bank of Tokyo-Mitsubishi and Mitsubishi Trust & Banking Corp. under Mitsubishi Tokyo Financial Group; Dai-Ichi Kangyo Bank, Fuji Bank, the Industrial Bank of Japan and Yasuda Trust & Banking Co. under Mizuho Holdings; Sanwa Bank and Tokai Bank under UFJ Holdings; Norinchukin Bank; and Sumitomo Mitsui Banking Corp.

S&P also said it has placed the long- and short-term ratings for Sumitomo Trust & Banking Co. and Toyo Trust & Banking Co. on CreditWatch with negative implications.

The agency said it "will examine the latest asset quality trends, borrower classifications, and provisioning policies of the banks" to resolve the review placement.

But it also noted: "The probability of an eventual downgrade is smaller for the Bank of Tokyo-Mitsubishi, Mitsubishi Trust, Norinchukin, Sumitomo Trust and Toyo Trust, given the five banks' relatively better financial profiles for their respective ratings.

"The CreditWatch placement is the result of the increasingly negative impact on the banks' asset quality from Japan's faltering domestic economy, with the risk of a deeper recession increasing month by month.

"Given the large amount of loans classified as 'needing attention,' the Japanese banks' asset quality is particularly sensitive to weaker economic conditions. Furthermore, there is a high risk that the financial condition of corporate borrowers will continue to deteriorate and at a faster pace than previously."

S&P said it believes the banks will experience higher-than-expected credit losses in the next year or two, which will be a challenge given their poor earnings and modest capital.

The ratings on the 12 institutions incorporate the possibility that Tokyo will support the financial system as required, the agency said. But it said government protection is not assured and it will be closely evaluating Tokyo's responses in a "stress scenario."