Moody’s Downgrades Japanese Banks’ Outlook

Moody’s has downgraded Japanese banks’ outlook from stable to negative amid rising concerns about Japan’s continued ultra-loose monetary policy. According to Vice President Shunsaku Sato at Moody’s, the country’s accomodative monetary policy may be sustaining its economic growth but it has adversely impacted profitability of banks.

Sato also expressed his hope that the Bank of Japan maintains the monetary policy at its current state even though inflation continues to hold below the 2% target while growth falters. Currently, the short-term rates are maintained at -0.1% while long-terms yields have an interest rate of 0%.

Three of the largest banks in the country have announced lower annual profits on Wednesday, even as the Japanese economic situation continues to worsen.