There are cases in which Japanese and U.S. bank stocks decline even as interest rates rise. Differences in the shape of the yield curve and in monetary policy between Japan and the United States are cited as underlying factors.
Japanese and U.S. bank stocks have recently undergone a correction. Rising interest rates are often viewed as a positive factor for banks, but stock-price movements are not uniform, and there are also cases in which prices decline. It has been pointed out that it is necessary to understand not only the level of interest rates, but also the shape of the yield curve and changes in it.
In the United States, the high-interest-rate environment amid monetary tightening is said to have affected banks’ funding costs and bond investments. In Japan, the Bank of Japan’s monetary policy normalization has reportedly contributed to improved bank earnings.
This article is said to explain the four changes in the yield curve, starting with banks’ business models, as well as the outlook for Japanese bank stocks.