Japanese lenders will report quarterly figures that fully reflect the end of negative interest rates for the first time. Investors expect solid earnings that will send stock prices higher again.
With the Bank of Japan (BOJ) raising interest rates this year, expectations are rising that banks’ profitability will improve. According to calculations by Bloomberg Intelligence, banks with larger domestic assets and cash at the BOJ are expected to be more sensitive to the country’s rate hikes.
The price-to-book ratio of Japanese banks rose to 0.85 times at the end of June from 0.66 at the end of December. Return on equity for more banks is expected to exceed 8% if the BOJ raises interest rates further, BI analyst Hideyasu Ban wrote in a report.
