S&P raises ratings for Japan's major banks

Standard and Poor's on Monday raised its long-term ratings for Japan's three major banks by a notch, saying the companies were improving as the economy expands.
The credit-rating agency upgraded counterparty ratings for Mitsubishi UFJ Financial Group - the world's largest banking group by assets - as well as Mizuho Financial Group and Sumitomo Mitsui Financial Group to A from A-minus.
"The upgrades reflect the banks' adequate enterprise risk management, stable improvement in asset quality and capitalisation backed by the strong economy in Japan, and the diversification of revenue sources," Standard and Poor's said in a statement.
Japan's banks are finally emerging from a bad debt crisis stretching back more than a decade as the world's number two economy emerges from its long spell of deflation. The Bank of Japan in July 2006 ended more than five years of virtually free credit although it kept interest rates on hold at 0.5 percent in February.
"The Bank of Japan has raised its base interest rate twice and is expected to raise it again which will have a positive effect on the banks' loan margins in the medium- to long-term," Standard and Poor's said.