Tokyo―Japan's big banks are set to dispose of 29% more bad loans than they originally planned for the just-ended business year as government inspectors prod lenders to take a harsher look at indebted contractors, property firms and retailers. A key index of Japanese bank stocks, the Topix banking-industry subindex, rallied 1.6% to 206.32 last Tuesday as investors decided that most of the bad news on bank earnings was now out. Yet many analysts and―privately―some Japanese bankers themselves say their problems, even with big corporate borrowers, are far from solved.
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