Shares in Japan’s major banks tumbled Tuesday amid concerns over the nation’s financial system, with the four biggest banks all hitting intraday lows for the year and Mizuho Holdings Inc. sinking below the key 100,000 yen mark.
Mizuho Holdings, the world’s biggest bank in terms of assets, closed at 99,700 yen, down 19,300 yen, or 16.21 percent, from the previous day after testing its daily limit of 99,000 yen.
UFJ Holdings finished at its limit-low for the day of 89,000 yen, down 10,000 yen, or 10.10 percent.
The banking subindex on the Tokyo Stock Exchange logged a fresh intraday low for the year of 148.14, down 32 percent from its levels in late September.
Mitsubishi Tokyo Financial Group Inc. ended at 648,000 yen, down 32,000 yen, or 4.7 percent, after slipping to its year-to-date low of 628,000 yen.
Sumitomo Mitsui Banking Corp. finished at 335 yen, down 21 yen, or 5.89 percent, after falling as low as 310 yen.
Bank shares were hit by a barrage of selling by institutional investors, brokerage dealers and individuals who trade over the Internet. UFJ, for example, met large-lot selling through Daiwa Securities SMBC Co., while Mizuho was sold through Nikko Salomon Smith Barney Ltd.
Selling in UFJ Holdings accelerated in the afternoon after Moody’s Investors Service Inc. said it has downgraded the preferred stock ratings of two issuers related to UFJ Holdings to Ba1 from Baa2, with an unchanged negative outlook.
Brokers said major banks will likely continue to sink due to fears that further falls in share prices may increase downward pressure on banks’ dwindling capital bases.
The market will not see a strong rebound in share prices unless the government launches impressive policy steps such as a larger-than-expected extra budget and tax cuts, and indicates how it plans to dispose of soured loans held by Japanese banks, they said.
“Major banks will likely remain sluggish until the government shows a clear direction on the near-term vision of the financial sector,” said Norihiro Fujito, senior investment strategist at Mitsubishi Securities Co. “That may include a proposal that UFJ, for example, retreat from international operations — as Resona Holdings Inc. did — to concentrate more on domestic businesses.”
Based on their lowest quotes Tuesday, the stock of UFJ Holdings is down 65 percent from levels in late September, Mizuho and SMBC are 55 percent lower and MTFG is down 30 percent.
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