Japanese financial stocks fell sharply Friday, extending their losses after the Bank of Japan kept its easing program unchanged, dashing hopes for higher rates.
Shares of Mitsubishi UFJ Financial Group Inc.
8306,
were recently 5.0% lower at 943.6 yen ($6.93) and shares of Dai-ichi Life Holdings Inc.
8750,
were down 4.9% at Y2,765.0.
The Bank of Japan on Friday maintained its cap on the 10-year Japanese government bond yield at 0.5%
TMBMKJP-10Y,
and kept short-term interest rates at minus 0.1%.
The newest 10-year JGB yield fell to 0.445% following the BOJ decision, from 0.495% prior to the policy announcement.
Japanese financial stocks rose sharply after the BOJ in December raised the 10-year yield cap to 0.5% from 0.25%. Higher government bond yields meant banks and insurers could charge higher interest rates on commercial loans and earn better yields from bonds and other financial instruments
Market speculation for further policy shifts continued since the BOJ’s move late last year.
This week’s policy meeting was the last scheduled one under Governor Haruhiko Kuroda, who spent his 10-year tenure maintaining ultralow interest rates. His successor, Kazuo Ueda, received final approval from Parliament this week to take over the governor role.
Prior to the BOJ policy announcement on Friday, Japanese financial stocks were already down, after U.S. bank stocks fell sharply overnight. Investors dumped shares of SVB Financial Group and a wide swath of U.S. banks after the tech-focused lender said it lost nearly $2 billion selling assets.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
