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Japanese bank shares rise as BOJ considers rate hike
(Bloomberg) — Japanese bank shares rallied the most since January after the country’s central bank raised its benchmark interest rate and unveiled plans to reduce bond purchases.
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The Topix Banks Index rose as much as 4.2% amid speculation that lenders’ interest income will improve as rates rise. The gauge extended gains from early trading, when it was already the best-performing sector, after local broadcaster NHK reported that BOJ officials will discuss raising interest rates.
Japan’s biggest lenders, including Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc., which is due to report earnings after the market close on Wednesday, rose more than 2%.
The BOJ raised its policy rate to about 0.25% from a range of 0 to 0.1%, according to its statement. It also said it would reduce its monthly bond-buying pace to about ¥3 trillion ($19.6 billion) in the first quarter of 2026.
Earlier this month, Japan’s megabanks urged the BOJ to make deep cuts to its monthly bond purchases during market participant hearings at the central bank, according to people present.
Meanwhile, real estate stocks were lower as higher borrowing costs are expected to weigh on developers. The yield on the benchmark 10-year bond rose to 1.055% before paring that increase.
(Updates with BOJ decision throughout the text.)
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