Tokyo (EFE).- Three of the largest Japanese banks, Mitsubishi UFJ, Mizuho and Sumitomo Mitsui, registered strong stock market falls today along with other Japanese entities in the sector due to fear of their exposure to the bankruptcy of Silicon Valley Bank (SVB).
The main index of the Tokyo Stock Exchange, the Nikkei, fell 2.19% on Tuesday to its lowest level in three months and after having fallen as much as 2.6% during the day, dragged down by nervousness in the banking sector.
The First Bank of Toyama, based in the center of the Japanese archipelago, plummeted 11.69%, the biggest drop of the day among the companies in the main section (those with the largest capitalization in the local stock market), without any disclosure. if you have ties to SVB or the also bankrupt Signature Bank.
It was followed by the company Meiko Electronics, with a fall of 11.55%, and ACCESS, specialized in internet services, which lost 9.98% after revealing that its US subsidiary IP Infusion has a capital deposit of about 11.6 million dollars in SVB.
Investors react pessimistically
Despite the fact that the company assured in a statement that it considers that the impact of this event on its performance and finances will be “insignificant”, investors reacted pessimistically.
The Mitsubishi UFJ financial group was the most traded company of the session and fell 8.58%, closely followed by its competitors Sumitomo Mitsui and Mizuho, which fell 7.56% and 7.13%, respectively.
The asset management conglomerate Sumitomo Mitsui Trust – independent of the financial group of the same name, although with economic ties -, with a stake of just under 2% in SVB, fell 5.53%.
Also among the most traded and badly stopped companies of the day was the technology group Softbank, one of the values with the largest capitalization in Tokyo, which lost 4.07%.
Softbank is not directly linked to SVB, but its huge investments in technology companies through its funds have raised concerns about the future of the deposits and loans that the latter may have in the bankrupt financial institution, which would further impact its already punished portfolio.
The fall in yields on 10-year Japanese government bonds also had a negative influence on banks today, punishing their profitability forecasts.
These yields fell as low as 0.2% during the day, before returning to 0.25% at close, but far from the 0.5% range acceptable to the Bank of Japan (BoJ).
Tokyo financial markets are among the worst responding to the weekend announcement of the bankruptcy of the two US financial institutions, which while expected to have a limited impact in Asia, has raised concerns over reminiscences with the bankruptcy of Lehman Brothers.
Japanese Finance Minister Shunichi Suzuki insisted today that Japan believes that the possibility of SVB’s bankruptcy affecting the Japanese financial system is low and that the US authorities are taking action.
US financial regulators have said they will take steps to ensure the protection of all insured deposits and customer repayments, but shareholders and some debt holders will not be protected.