Japanese Banks Sound Caution for Earnings as Omicron Highlights Bad Loan Risks

Japanese Banks Sound Caution for Earnings as Omicron Highlights Bad Loan Risks
People walk past a branch of Mitsubishi UFJ Financial Group's bank of Tokyo-Mitsubishi UFJ (MUFG) in Tokyo, Japan, on May 16, 2016. Thomas Peter/Reuters
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TOKYO—Japan’s biggest lenders on Wednesday all sounded alarmed about the risk the Omicron variant could have on their earnings, reviving concerns that a resurgent pandemic could trigger more bad loans.

It was a sobering assessment from Japan’s three top banks—some of the world’s biggest lenders by assets—and underscored how the latest coronavirus variant could put more downward pressure on an already fragile domestic economy.