Japanese banks suffering from subprime crisis

Sumitomo Mitsui Financial Group (SMFG) said yesterday that it held AAA-rated subprime mortgage-backed securities (MBS) worth ¥13.5 billion, and had lost ¥200 million due to exposure to US subprime by the end of July. Mitsubishi UFJ said its losses had reached ¥5 billion, on subprime MBS worth ¥280 billion, by the same time. Its shares fell 5.7% on the news. SMFG shares also declined, falling 1% yesterday - the third successive day of decline.

But finance minister Koiji Omi said earlier today that the subprime crisis "will not have a serious influence" on Japanese banks; "with the Japanese, US and European central banks responding quickly (to the subprime troubles), there is an impression that overall we have turned the corner," he said.

Previously on Risk News:
Trichet: the worst is over in subprime crisis
Sovereigns step in as ABS funds reel

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