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Banks in Japan are facing sharply higher costs for bad loans due to the novel coronavirus pandemic, but the damage is unlikely to show through in first-quarter earnings reports.

The three largest lenders have already forecast credit costs swelling to an 11-year high of $10 billion in the year ending March 2021. Yet analysts predict actual expenses booked in the April to June quarter were relatively low, because companies have been tapping credit lines and Bank of Japan loan assistance that will give them room to ride out the storm, at least for now.

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