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Japan's bank lobby chair suggests that tariff-hit companies may require business turnaround financing.

Japan's bank lobby chair suggests that tariff-hit companies may require business turnaround financing.

The head of Japan's banking lobby has said that Japanese banks might need to provide business turnaround assistance to companies affected by tariffs imposed on them by Donald Trump's administration.

This week, many large Japanese companies, including major exporters, manufacturers and suppliers, will be facing U.S. tariffs on steel and aluminum imports, as well as a 25% duty on imported cars and small trucks.

In an interview, Junichi Hanzawa said, "We believe tariffs could result in a decline in corporate earnings."

Hanzawa said, "We'll have to see if this burdens employment and wages and becomes a burden on companies and household repayments."

A poll conducted in February showed that almost 90% of Japanese businesses view the Trump administration negatively. The majority cited trade policy, including tariffs, as the main factor.

Hanzawa said that bank customers might also require turnaround assistance in addition to their normal financing.

Hanzawa said that Japan's companies and banks remained committed to the decarbonisation effort despite the withdrawal by several major banks from Net Zero Banking Alliance.

In the last month, Japanese signatories such as Mitsubishi UFJ Financial Group Sumitomo Mitsui Financial Group Norinchukin Bank and other Japanese banks have withdrawn from the framework following the withdrawal of Wall Street Banks.

Hanzawa stated that "we don't think recent moves are connected to any change in the fundamental principles of Japanese banks regarding climate change."

Hanzawa is the chief executive officer of MUFG Bank, MUFG Bank's banking division.

Hanzawa, referring to MUFG's decision to withdraw from the system, said that it was a good tool for disseminating information. However, with major U.S. banks and Canadian banks pulling out of the system its influence has decreased.

Hanzawa stated that MUFG does not intend to change its current commitments or strategy regarding carbon neutrality. (Reporting and editing by Anton Bridge, Miho Uranaka)

(source: Reuters)