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If any banks can tell you how to survive decades of low interest rates, it’s Japanese ones. The country’s overnight rate has been below 1% since the mid-1990s, and last year, the Bank of Japan became the first central bank to experiment with a negative rate.
Volatility in domestic stock markets and the national currency, low GDP growth, sluggish loan demand and tougher post-crisis capital requirements have only made it harder for Japan’s banks, which have typically relied heavily on domestic lending, to achieve steady earnings growth.
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