Japan banks sector: 2026 investment strategy: Banks 2.0: Re-imagining Japan‘s financial sector

研报英文原文证据摘录

Japan banks sector: 2026 investment strategy: Banks 2.0: Re-imagining Japan‘s financial sector

Global Markets Research

Japan banks sector: 2026 investment strategy 10 July 2026

EQUITY: JAPAN BANKS

Japan banks sector investment strategy (Jun 2026): Banks 2.0 Research Analysts

Japan banks

Banks 2.0: Re-imagining Japan's financial sector Ken Takamiya - NSC

ken.takamiya@nomura.com

+81 3 6703 1140

Banks sector investment strategy (June 2026) Ryotaro Terazawa - NSC

We are still bullish on Japan's major banks sector. With the major banks trading at P/Bs of ryotaro.terazawa@nomura.com

1.1–1.6x on end-26/3 BPS, and considering the prospects for future margin improvements +81 3 6703 1037

revealed in their 26/3 full-year results announcements, we think many major banks are still Yusaku Tsujimoto - NSC

undervalued. Our financials team expects the next BOJ rate hike to be in winter 2026 yusaku.tsujimoto@nomura.com

(December 2026 in our main scenario). Barring subsequent changes in the US economy +81 3 6703 1731

or markets, we think a gradual rate hike cycle will continue until the BOJ reaches a

terminal rate of around 1.50–1.75%, as has been priced in by the bond and rates markets

(according to QUICK survey and other data).

In terms of stock selection, we recommend Sumitomo Mitsui Financial Group (SMFG)

[8316] (Buy) because of its solid cost controls and strong loan–deposit operations in

Japan, as well as the ongoing prospect of capital growth and improvement in its

shareholder returns. We also have Buy ratings on Mitsubishi UFJ Financial Group

(MUFG) [8306] (Buy) and Mizuho Financial Group [8411] (Buy) from a longer-term

perspective.

Earnings and points to watch at major banks

While some investors may be disappointed by the details of shareholder returns revealed