Moody's Investors Service Inc. on Friday gave Japan's regional banking sector a negative rating outlook.
Of the 30 regional banks rated by Moody's, six are under review for possible downgrade, while the rating outlook for nine others is negative, according to the major U.S. credit-rating agency.
"Such a broad distribution of entities facing downward rating pressure is a reflection of the scale of problems confronting the overall Japanese regional banking sector," Moody's said.
Credit ratings for the banks in question range from Aa3 to a low of Ba1.
Moody's stated that the franchise value of the regional banks is being seriously eroded because of the "hard economic realities" affecting Japan's regional economies.
Since the removal in April of the government's blanket refund guarantee on time deposits, money appears to be gradually shifting from smaller, weaker entities to stronger, larger regional and city banks, the agency said.
The government's blanket guarantee on ordinary deposits is scheduled to end in April.