Risk of net interest margin compression due to negative interest rates

「In financial markets, the yield on 10-year Japanese government bonds, a benchmark for Japan’s long-term interest rates, followed an upward trend, rising from the 1.8% range in mid-November to the 2.3% range in late March in response to the government’s policy of proactive fiscal spending.」

「In financial markets, the yield on 10-year Japanese government bonds, a benchmark for Japan’s long-term interest rates, shifted to an upward trend from around 1.3% after May and exceeded 1.6% from August.」

「At the same time, the Bank of Japan’s gradual policy rate increases brought the long-standing era of negative interest rates to an end and ushered in a “world with interest rates,” marking a major turning point for the bank group.」

「In financial markets, the yield on 10-year Japanese government bonds, a benchmark for Japan’s long-term interest rates, remained generally above 1.0% from late May to early August. However, after the Bank of Japan raised its policy rate at the end of July and signaled its willingness to raise rates further, concerns over a US recession led to a rapid appreciation of the yen and a sharp decline in the Nikkei 225 Stock Average. The yield on 10-year Japanese government bonds also fell sharply, but financial markets subsequently stabilized as the Bank of Japan adopted a cautious stance toward additional rate hikes and concerns over a US recession eased, with the yield continuing to move mainly around the 0.8% range.」

「There were no newly arising business or other risks during the third quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「While monetary tightening continued, led by the central banks of the United States and Europe, the Bank of Japan maintained its monetary easing policy but decided to make its yield curve control operations more flexible. The yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, rose into the 0.7% range. It subsequently rose to the mid-0.7% range, also affected by rising long-term interest rates in the United States.」

「While monetary tightening continued, led by the central banks of the United States and Europe, the Bank of Japan maintained its monetary easing policy. The yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, temporarily rose to nearly 0.5% amid expectations that the Bank of Japan’s yield curve control policy might be lifted sooner than expected, but subsequently remained between the low 0.4% range and the high 0.3% range.」

「The yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, rose from the 0.2% range toward the end of the year after the Bank of Japan widened the trading range for its yield curve control policy. It remained generally around 0.5% after the beginning of the year, but fell in March amid financial concerns in Europe and the United States, ending the fiscal year at 0.32%.」

「The yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, had remained in the low-to-mid 0.2% range, except for a brief period, but rose to generally around the mid-0.4% range after the trading range for long-term interest rates was widened.」

「However, following the rise in overseas interest rates, particularly in the United States, since the beginning of the year, the 10-year government bond yield also rose to above 0.2%.」

「In financial markets, amid challenging economic conditions and the Bank of Japan’s aggressive monetary easing policy, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, remained generally close to 0%.」

「In financial markets, amid challenging economic conditions caused by the COVID-19 pandemic and the Bank of Japan’s aggressive monetary easing policy, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, remained around 0%.」

「In financial markets, amid challenging economic conditions and the Bank of Japan’s aggressive monetary easing policy, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, remained around 0%.」

「In financial markets, amid challenging economic conditions and the Bank of Japan’s aggressive monetary easing policy, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, rose slightly from February but remained around 0%.」

「In financial markets, amid challenging economic conditions and the Bank of Japan’s aggressive monetary easing policy, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, remained around 0%.」

「In financial markets, amid challenging economic conditions and the Bank of Japan’s aggressive monetary easing policy, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, remained around 0%.」

「There were no newly arising business or other risks during the first quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「The operating environment for financial institutions is becoming even more challenging. In addition to the prolonged low-interest-rate environment, global financial and capital markets have become more volatile due to the impact of the COVID-19 pandemic, making it increasingly difficult to secure yields on lending and securities investments.」

「There were no newly arising business or other risks during the second quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「Although the Japanese economy has continued to recover moderately, the operating environment for financial institutions is becoming even more challenging due to the prolonged monetary easing policy, which has narrowed margins on lending and securities investments, as well as the emergence of new entrants from other industries.」

「There were no newly arising business or other risks during the second quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「There were no newly arising business or other risks during the first quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「Although the Japanese economy has continued to recover moderately, the operating environment for banks is becoming increasingly challenging as the negative interest rate policy continues and margins on lending and securities investments trend downward.」

「There were no newly arising business or other risks during the third quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「There were no newly arising business or other risks during the second quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「There were no newly arising business or other risks during the first quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「The operating environment for financial institutions is becoming increasingly challenging, with lending and securities investment yields declining as the Bank of Japan’s negative interest rate policy continues, while investment margins are also being squeezed by rising US dollar interest rates.」

「There were no newly arising business or other risks during the third quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「In financial markets, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, remained in negative territory as a result of the Bank of Japan’s monetary easing policy.」

「There were no newly arising business or other risks during the first quarter of the current consolidated cumulative period. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「In financial markets, partly following the introduction of the Bank of Japan’s negative interest rate policy in February 2016, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, fell into negative territory.」