Japan banks urged to brace for Fed hike

Tokyo

JAPAN'S financial regulator is urging banks to strengthen safeguards against potential market turbulence from a US interest rate hike expected later this year, according to a document seen by Reuters.

Policymakers believe Japan's banking system remains sound with no immediate signs of financial imbalances or excessive risk-taking. But with massive holdings of Japanese government bonds (JGB) and increased exposure to overseas lending, Japanese banks remain vulnerable to losses if interest rate hi…