No turning back for Japanese banks
Yutaka Matsumoto brought an unusual memento back from the Philippines to his office at Bank of Tokyo-Mitsubishi (BoT-M) in early July: the original press release announcing the effective devaluation of the peso, signed in red ink by president Fidel Ramos of the Philippines.
Matsumoto, general manager of BoT-M's Asia and Oceania division was present at an economic briefing given by Ramos. The announcement interrupted proceedings, and Matsumoto acquired his souvenir.
A week later Matsumoto was in Tokyo. He and representatives of 21 other Japanese financial institutions were spending time with another group of senior officials. Currency was again on the agenda. The steady slide in the value of the baht had prompted Thai finance minister Thanong Bidaya and foreign minister Prachuab Chaiyasan to seek help in rebuilding foreign reserves.
After years of relative stability (against the US dollar if not the yen) the sudden weakness in the currencies of most south-east Asian countries is having an important impact on many Japanese financial institutions.
"Most Japanese banks have been expanding their business exposure to Asia," says Shunsuke Kanzawa, deputy general manager, international planning, at Sumitomo Bank.