Tariff-hit firms may need business turnaround financing, Japan’s bank lobby chair says #JapanFinance

By Anton Bridge and Miho Uranak

TOKYO, – Japanese banks may need to offer business turnaround support to companies hit by tariffs imposed by the administration of U.S. President Donald Trump, the head of the country’s banking lobby said.

Many large Japanese firms, including major exporters and manufacturers, are grappling with U.S. duties on imports of steel and aluminium and a 25% tariff on imported cars and light trucks starting this week.

“We think tariffs could lead to a deterioration in corporate earnings,” the new chair of the Japan Banks Association, Junichi Hanzawa, told Reuters in an interview.

“We will have to ascertain whether this weighs on employment and salaries and then become a burden for companies’ and households’ repayments,” Hanzawa added.

Almost 90% of Japanese companies see the Trump administration as bad for business, with the majority of these pointing to trade policy – including tariffs – as the most detrimental factor, a Reuters poll showed in February.

On top of their usual financing, bank customers may also need turnaround support, Hanzawa added.

Hanzawa also said that Japan’s banks and companies remained committed to decarbonisation efforts despite the withdrawal of several major banks from the Net Zero Banking Alliance decarbonisation framework.

Following the departure of Wall Street banks from the framework, Japanese signatories including Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Norinchukin Bank have pulled out in the past month.

“We don’t see recent moves as connected to a change in Japanese banks’ fundamental principles about responding to climate change,” Hanzawa said.

Hanzawa is also chief executive of MUFG’s banking arm, MUFG Bank.

“It was a very good framework for sending out information, but with the withdrawal of major U.S. and Canadian banks it has lost influence,” Hanzawa said of MUFG’s withdrawal.

MUFG has no intention of altering its existing commitments and strategy on carbon neutrality, Hanzawa said.

This article was generated from an automated news agency feed without modifications to text.