Japan dealers’ derivatives exposures keep inflating

MUFG, SMFG and SMTH added almost ¥6 trillion to their balance sheets in the three months to end-September

Derivatives exposures at three of Japan's largest dealers rose almost 20% in the second financial quarter, compounding pressure on Tier 1 capital to erode their leverage ratios.

The derivatives component of the aggregate leverage exposure of Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG) and Sumitomo Mitsui Trust Holdings (SMTH) climbed to ¥36 trillion ($268 billion) in the three months to end-September.

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