Japan's top 3 banks post big profit gains on surging stock market

Abenomics' goal achieved! Ain't that the sole purpose of QE ? financial instituion profiting on sudden stock price increase, crash, rinse and repeat. Japan who built its prosperity on manufacturing, is now shifting its priorities to financial industry for easy money and illusory economic growth. Japan and the world put too much focus on North American market whose only solution to its economic problems is more QE. This is not going to end well.

I would prefer Abe had organized an economic recovery through deregulation and reform, rather than spending more of future tax payer's money and having the BOJ engage in QE, but to be fair, it's not really just the banks that are doing better.

A year ago, any individual with some cash tucked away had the chance to benefit from Abenomics by (for example) buying Japanese stocks or selling yen and buying foreign currencies. The Nikkei 225 is up more than 5,000 points and the yen has depreciated by 20% depending on your point of reference. One doesn't have to be loaded to have taken advantage of these moves, it's possible to get started with as little as the cost of a meal at an izakaya. These options were available to anyone with their eyes open and the preparedness and willingness to play the cards that Abe dealt. Those who missed out this year can rest assured that there will be opportunities again in future.

Tourism seems to be doing well, too. Apparently even the Chinese are buying more Japanese cars again.

It'll be interesting to see how much tax revenue increases. With the banks making more and individual investors and speculators having likely made good money this year, they should be up nicely.

Abe wants to try to fix Japan through positive measures that get Japan firing on all four cylinders again. I too am skeptical that he will succeed, given the whopping amounts of debt previous governments racked up already, but at least for the time being I'm giving his approach the benefit of the doubt, to a degree. But he will need to come up with more concrete deregulation measures, just destroying the yen alone won't achieve his goals.

Banks are making enormous profits while interest on savings are almost zero The japanese may be the most screwed citizens in the entire world.

The profits look good on paper, but paper is all they are. A great deal of the world's capital is floating around waiting to be pumped into various bubbles, only to be sucked back out just before the bubbles pop. Then they move on to the next bubble. I doubt by this time next year the Japanese banks' domestic balance sheets will look as rosy as they are today.

The increases in profit result in speculation not on real economic growth or activity, but on the momentum of waves of sentiment. No banker actually believes there is anything in Japan worth investing in, but the uptick which begins with a new policy like Abenomics draws investors looking to profit by momentary upward momentum. Once the wave reaches a high point, they all jump out of the pool, taking their profits with them.

The banks are not going to put their paper profits back into Japan, where there is no hope of earning a return on them. These profits are already earmarked for investment in Malaysia, Indonesia, and elsewhere.

Banks making huge profits is not the news I want to see.

Gains in production areas are what we need.

Gains in exports will fix the economy.

Abe won't.

drlucifer,

Banks are making enormous profits while interest on savings are almost zero The japanese may be the most screwed citizens in the entire world.

The Japanese are not forced to keep their savings in Japanese yen deposits though (and that wasn't such a bad idea until Abe decided to try to end deflation last year, but probably a fluke).

Generalizing, you might say that the Japanese may be the most financially irrational citizens in the entire world, so to the extent that they are screwed it's largely due to their own apathy and blind trust in the nutcases that they have elected over the years.

But then your typical citizen in a lot of western countries probably has been brainwashed into thinking that keeping his/her money close to home is "patriotic", no matter what crazy things their governments might be doing with it.

In this respect I think the citizenry of the up-and-coming nations may just be a little more enlightened, and it's probably a sign of how the world is likely to change this century.

Just wait until it crashes.

At > jeff198527. YOU GET IT!! He sees what they are doing. Even that yakuza loan bull, its not true! The majority of their banking system is mafia! They are all in on it!

and loaning it to the Yakuza? The banks should be fined and the money given directly to the people of Fukushima

The government is distributing QE to the government (in the form of bond buying) and to the banks in the form of cheap liquidity (increasing the deposit balances of banks who have accounts with the Japanese Central Bank).

Just as in the US, this will promote inflation for consumers along with a decrease in a desire of these consumers to save. Without savings, no investment will take place. Without investment, production will not increase.

America has become a nation of retailers. Japan will follow in a similar path. Once people realize that the Japanese government cant and wont pay them back in constant Yen, the ponzi scheme will be up and their will be a major, major recession.

I've broken Japan's "malaise" down to three possibilities:

They're doctoring statistics to make things look worse than they actually are in order to prevent a bubble.

3.Japan is diverting their economy into something else.

Never in history has a nation ever entered a "deflationary spiral". The definition of an economy is "The production, buying, and selling of goods and services".If Japan is producing and selling goods and services then why isn't their economy growing?