In today’s briefing:
- Ohayo Japan | Japan Ruling Coalition Loses Majority
- Bank Margins Under Pressure: Navigating the Rate Cut Ripple
Ohayo Japan | Japan Ruling Coalition Loses Majority
- U.S. stocks ended mixed Friday as tariff tensions weighed on the Dow, earnings remained strong overall, and consumer sentiment improved with easing inflation fears.
- The Magnificent Seven megacap technology companies are set to begin reporting earnings this week, starting with Alphabet and Tesla,
- Japan’s ruling coalition lost its re-election majority in the Upper House, with PM Ishiba vowing to continue talks amid pressure from ongoing U.S. tariff negotiations.
Bank Margins Under Pressure: Navigating the Rate Cut Ripple
- The 100bp rate cut cycle is transmitting unevenly, with Private Banks raising loan spreads to 415bp while PSBs cut more sharply, compressing margins.
- This divergence is reshaping profitability, with NIMs under pressure through Q2–Q3 FY26 and relief delayed by slow deposit rate repricing.
- Margin recovery now hinges on H2FY26 onwards, aided by CRR liquidity, easing funding costs, and credit cost normalization.
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