Japan's megabanks forecast more record profits despite tariff uncertainty
[TOKYO] Japan's three largest banking groups posted record annual net profit in the last financial year, benefitting from increased corporate activity due to the end of deflation in Japan.
The banks also expect to increase earnings this financial year – forecasting record profits once again – even though the economic outlook has been muddied by US President Donald Trump's sweeping global tariffs.
Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group booked net profits of 1.86 trillion yen (S$17.8 billion), 1.18 trillion yen and 885 billion yen, respectively, in the 12 months ended March 2025.
The banks said the impact of the tariffs and the resulting uncertainty was already being felt, and was accounted for in their forecasts.
Japan's largest lender MUFG cited a global economic slowdown, continued market volatility and lost trust in the US dollar among risk factors, but nevertheless forecast a record net profit this financial year of two trillion yen.
SMFG projected net profit of 1.3 trillion yen and Mizuho 940 billion yen, including downward adjustments of 100 billion yen and 110 billion yen, respectively, to account for continued uncertainty.
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Mizuho's pipeline of equity capital markets and mergers and acquisitions deals is currently backed up as shifting business conditions make decision making on large-scale investment challenging, chief executive Masahiro Kihara told a press briefing in Tokyo on Thursday (May 15).
But the banks expect Japanese companies to keep investing and each has extensive overseas operations across different financial services including retail and investment banking, asset management and wealth management.
'We have operations across Japan, Asia and the Americas with varied sources of profit, so we are strong in any business environment,' MUFG chief executive Hironori Kamezawa told a press briefing.
MUFG owns 24 per cent of US bank Morgan Stanley, a business alliance that began in 2008. The holding contributed more than a quarter of MUFG's annual net profit.
Asia has also been a growth market for the banks. Most recently, SMFG announced last week its acquisition of a 20 per cent stake in Indian private lender Yes Bank.
But the tariff uncertainty means SMFG too is holding off on further acquisitions, CEO Toru Nakashima said on Wednesday.
Japan's banks have been among the largest beneficiaries of the end of deflation in Japan, which has encouraged Japanese companies to borrow to invest at home and abroad and carry out mergers and acquisitions.
The return of inflation also pushed the Bank of Japan to end its policy of negative interest rates in March 2024 and hike rates twice thereafter, raising lending margins for Japanese banks. REUTERS
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Straits Times
3 hours ago
- Straits Times
Why restaurants like Scarpetta do not take reservations
Mr Theeviyan Raja (left), a front-of-house staff member at Scarpetta, welcomes diners as the restaurant opens for dinner. By 6pm, around 80 customers had joined the queue. ST PHOTO: BRIAN TEO Why restaurants like Scarpetta do not take reservations SINGAPORE – Dining out is a fairly straightforward process in Singapore, swathed, for the most part, in the certainty of a guaranteed seat. You pick a place, punch in your details and rock up at the prearranged hour. Recognition glints in the host's eyes as your name surfaces in the system. The food arrives after a while. You pay, you leave. In some cases, a special reservation link is sent to your e-mail, and the cycle begins anew. But what happens when a restaurant eschews convention for the unpredictability of a walk-in system? Suddenly, it is anyone's game. The question becomes not just what to order, but also what time to show? How long to wait? When to throw in the towel and leave? Restaurants that do not take reservations argue that there is a method to the madness. At Scarpetta, a viral pasta bar in Amoy Street, queues start an hour before doors opens. Once, the line stretched 10 units down to the food centre at the mouth of the street. The situation is a lot neater now that the restaurant has introduced a new system. The first 28 guests are seated when doors open and everyone else is given a time to return, their names scribbled down on a tiny blackboard. 'It's much better than what we had before, with just a straight queue. Some people would wait 2½ hours in the hot and humid weather, so they would be really grumpy and hangry (hungry and angry) by the time they got in,' says owner Aaron Yeunh , 32. Service moves fas t. Ea ch seating lasts about an hou r, a nd Scarpetta can accommodate three or four rounds of guests every night. This, Mr Yeunh says, is the only way he can sell handmade pasta in the middle of town for $17 to $26. 'The only way to charge these prices is with high volume. And if I need volume, I can't take reservations because that would limit my dinner seatings to two a night.' Queues at Scarpetta tend to snake along Amoy Street, once even reaching Amoy Street Food Centre. ST PHOTO: BRIAN TEO For restaurants like Mensho Tokyo Singapore at Raffles City, doing away with bookings helps to democratise the dining experience. No number of bots or connections will make the line move any faster. 'This ensures that every guest has an equal opportunity to enjoy our ramen, creating a welcoming and fair experience for all,' says a spokesperson for the Japanese chain. Likewise, Mr Lim Kian Chun, 33, chief executive of Ebb & Flow Gro up, which runs popular Italian restaurant Casa Vostra at Raffles City, adds: 'Physical queues keep things simple and accessible to customers of all ages, especially our segment of older customers who are less familiar or comfortable with digital reservation systems.' Cancelling cancel culture It is a type of survival tactic too. With cancellations rising across the board – Mr Yeunh says that a 20 to 30 per cent cancellation rate, which some restaurants are experiencing, is enough to kill a business – it is sometimes easier not to section off seats in advance. Mr Lim says: 'Implementing reservations introduces the element of unpredictability with no-shows, late arrivals and variable dining durations, which can disrupt the dining experience for other s.' By eliminating the logistical scramble, staff can focus on the parts that count the most: food and service. And that extra bandwidth comes in especially handy when walk-in traffic continues unabated throughout the night. The first 28 guests are seated when doors open and everyone else is given a time to return, their names scribbled down on a tiny blackboard. ST PHOTO: BRIAN TEO Mr Yeunh recalls: 'We were really grateful that response was so overwhelming when w e opened in February, but part of the issue was that we were running out of food. So, people would wait two hours, only to find that we've sold out half the men u. I imagine that would be incredibly frustrating. ' The seven-person team, now fortified with two extra chefs, has since fine-tuned operations to guarantee that all guests who wait in line will be able to order whichever dishes they came to try. They try to estimate based on the capacity of the restaurant, but as a general rule, 'we make as much as we can'. Casa Vostra's team also had to adjust to the daunting task of keeping up with demand while maintaining a consistent quality of food and service. Over a year in, Mr Lim says they have got the hang of things. 'We've worked very hard to improve our daily operations and food and service standards, and hav e managed to reduce waiting times while continuing to serve the same volume of customers.' Great expectations The longer the queue, the higher the expectation. 'It best be worth the wait,' quips chef consultant Fiona Tang, 35, who eventually snagged a seat at Scarpetta 2½ hours after arriving. Her sentiment is echoed by fellow diner Kelly Pohan, a 17-year-old student who visited Scarpetta in May. 'The food does not just have to be good, but also good enough to justify wasting two hour s. ' However, she also relished the anticipation of waiting to try very in-demand restaurants, whi ch ' creates more excitement'. Service at Scarpetta moves fast, with most diners finishing their meal within an hour. ST PHOTO: BRIAN TEO For 20-year-old undergraduate Raen Tan, a snaking queue – like the one she joined outside Casa Vostra – is a worthwhile gamble. 'It suggests that the food is either good or new. As someone who's adventurous, I'd be willing to queue to try new things that are popular or raved about.' Besides, as Ms Joey Chua, 29, a liquefied natural gas market analyst, points out: 'I can do many other things, such as read, look through e-mails, reply texts or daydream while queueing. To me, it doesn't really count as a waste of time.' In Singapore, where queueing has all but been gazetted as a national pastime, hers is far from an atypical view. Dr Hannah H. Chang, associate professor of marketing at SMU, says it is an example of social proofing – a phenomenon in which people make decisions by following the actions of those around them – that has found special resonance here. 'Queue culture is sometimes discussed as a demonstration of kiasuism, that if you don't queue, you may miss out on a good deal, experience or produc t.' Mr Sai Ming Liew, a senior adviser at global research and innovation consultancy Behavioural Insights Team, adds that while the tipping point may come when customers feel that a queue is not moving fast enough, the sunk cost fallacy sometimes keeps them in place longer tha n intended. 'The longer people spend in a queue, the more they start to feel a sense of psychological ownership over the object or experience they're waiting for. Because people are naturally averse to losses, this can make them reluctant to walk away, even if it might no longer be worthwhile,' he notes. Though this fear of missing out has proved something of a boon to Scarpetta, Mr Yeunh laughs off accusations that he is creating a queue for the sake of it. 'I always tell the team that we have to deliver. Don't skimp on the hospitality. Don't skimp on the food. Be super focused. Take our food really, really seriously.' In the past, before the blackboard system freed customers from having t o sta nd in line outside the restaurant , staff would try to sweeten the wait by handing out free drinks. Refreshments are also distributed outside at restaurants such as Gyukatsu Kyoto Katsugyu at Raffles City. Nonetheless, some restaurants have caved and done away with their no-reservations policy. Spanish restaurant Esquina opened in 2012 and started accepting bookings in 2014, after it added a dining room on the second floor. Though walk-ins are more efficient for a busy restaurant like his, chef-owner Carlos Montobbio, 38, concedes that bookings made a big difference to the guest experience. 'We care a lot about service, and having people wait outside – especially if it's a business dinner, a date or regulars coming back – just didn't feel right. Letting people book a table gave them a much more comfortable and reliable experience,' he says. Others, like local cuisine chain Great Nanyang, which gets multiple queries a week about whether it takes reservations, have found a compromise of sorts. Since April, groups of at least 10 diners can secure their seats at any of its outlets in advance. 'As our customers have different dining time periods, it i s di fficult to get available empty tables side-by-side to combine for larger groups. To cater to groups of this size, we need to plan and set aside tables in advance,' says founder Keith Kang, 42. Though he is wary that the sight of empty tables may provoke some unhappiness among walk-in guests, no complaints have been made so far. Casa Vostra's Mr Lim is also grateful that most customers understand the reasons for the restaurant's policy, and vows to go the extra mile to maintain that trust. He says: 'Our team makes every effort to offer attentive service and maintain relationships with our regulars – from remembering their favourite dishes and preferences to connecting with them each time they dine.' Worth the wait? The next time you find yourself staring down the barrel of a weekend with no prearranged plans, try your luck at one of these no-reservations restaurants – the final bastions, some might say, of dinnertime democracy. Scarpetta Cacio e Pepe pasta with Crispy Guanciale from Scarpetta. ST PHOTO: BRIAN TEO Where: 47 Amoy Street Open: 11.30am to 2.30pm (Tuesdays to Saturdays), 6 to 10.30pm (Tuesdays and Wednesdays), 6 to 11pm ( Thursdays ), 6 to 11.30pm (Fridays and Saturdays) Info: @ on Instagram This chic 28-seater was modelled after the pasta bars of London – think Padella, the perennially popular Borough Market institution, and the like. So, it was that ethos of casual excellence that Mr Aaron Yeunh, who lived in the English capital for over a decade, sought to recreate here: great food at fair prices, without so much as a whiff of pretentiousness. Scarpetta's menu is lean and disciplined. It is split into four modest sections, with most prices hovering around the $10 to $20 range. The most expensive thing on sale is al granchio e limone ($26), a dish of taglioni with blue swimmer crab and confit garlic that would, in most other centrally located restaurants, have retailed for upwards of $30. There is undeniable finesse in the way pasta here is twirled – continuously and right before the eyes of hungry, restless diners too. The cacio e pepe ($20) is really a pasta alla gricia, with a black pepper-pecorino romano base and crispy guanciale topping. Whatever its name, it is a textural delight, perfect for anyone who prefers his or her pasta al dente and salted with pockets of fried fat. All'assassina from Scarpetta. ST PHOTO: BRIAN TEO The all'assassina ($18) with pomodoro tomatoes and chilli is more divisive, says Mr Yeunh. Diners might be forgiven for mistaking the messy nest of slightly burnt strands for a kitchen accident that snuck onto the table . But the char is intentional, and elevates the springy, spicy noodles in the same way wok hei breathes fragrance into a plate of bee hoon. Cut the heaviness with a radicchio salad dressed with a truffle vinaigrette and showered in parmigiano cheese ($14), before diving into the sweet embrace of dessert – milk gelato draped in extra virgin olive oil and flaky salt ($6). Tip: Visit during off-peak hours, such as 1.35pm on a weekday or after 8.45pm for dinner. Mensho Tokyo Mensho Tokyo Singapore is famous for its chicken soup ramen. ST PHOTO: CHERIE LOK Where: 03-43 Raffles City, 252 North Bridge Road Open: 11am to 9pm daily Info: @ on Instagram Mensho Tokyo, a Japanese ramen chain whose San Francisco outlet is currently listed in California's Michelin Guide, arrived in Singapore in July, trailed by hordes of curious diners eager for a sip of its umami-rich soup. Its signature toripaitan ($28++) la yers A5 wagyu chashu, smoked pork chasu, duck chasu, chicken chashu, king oyster mushroom strips and ajitama eggs on wavy wheat noodles. All this is steeped in a creamy chicken broth that does not immediately knock you out in the way that pork, with its stronge r fl avour, sometimes does. A dry alternative exists in the form of the A5 wagyu aburasoba ($41++), which blankets its chewy wheat noodles in two types of Miyazaki beef. A sauce made of barrel-aged shoyu adds savoury depth to this oily, indulgent bowl of noodles. Other more unconventional options include the duck matcha ($25++) and chilli crab ramen ($28++) – a Singapore-exclusive tribute to a local classic – which have yielded mixed reactions from diners. Th e restaurant also serves up a bevy of sides, like fried chicken ($12.80++) perfumed with Japanese black vinegar, crispy enoki chips ($8.80++) and torched corn with tare sauce ($8.80). Tip: Go on a Tuesday or Wednesday evening, when the restaurant tends to be quieter – you might even be able to enter without queueing. As wait times can reach up to 30 minutes on weekends, guests are encouraged to arrive early. Tonshou Hire katsu set from Tonshou. ST PHOTO: CHERIE LOK Where: 51 Tras Street Open: 11am to 9pm daily Info: @tonshou_sg on Instagram Tonshou is a Korean pork cutlet chain more than capable of going toe to toe with the top Japanese tonkatsu restaurants in Singapore. Its not-so-secret weapon? A charcoal-grilled pork cutlet that redefines what tonkatsu should look and taste like. Instead of rectangular blocks trimmed with fat – though it has those too – Tonshou's Instagram-famous hire katsu set ($28++) rolls in on blushing pork loin medallions. A meticulous four-stage cooking process packs the juices into the meat, ensuring the cutlet remains crispy yet succulent. The rosu katsu set ($28++), on the other hand, more closely resembles the version of this dish typically found at Japanese eateries, and offers much of the same textural duality, plus an added burst of fat. These breaded slabs of gold can also be stuffed between bread. A pork cutlet sandwich costs $21++, while a shrimp tempura sandwich goes for $24+ +. Because this is a Korean chain, all sets come with a small saucer of kimchi. The usual accoutrements follow too: miso soup, shredded cabbage and rice. Tip: The restaurant uses a QR-based remote queueing system, so join the waitlist before travelling to the restaurant to minimise waiting time. It is also in the process of setting up a reservation system. Casa Vostra Italian restaurant Casa Vostra has updated its menu with new dishes. PHOTO: CASA VOSTRA Where: 01-49/50/51 Raffles City, 252 North Bridge Road Open: 11.30am to 10pm daily Info: After a year at Raffles City, casual Italian joint Casa Vostra is still commanding formidable queues, even on weekday evenings. To keep up with the hype, the restaurant refreshed its menu in April, unveiling homely fare such as the aglio e olio ($15) inspired by the recipe of chef-owner Antonio Miscellaneo's moth er. It tosses in sun-dried tomatoes for some summery pizzazz. The beef cheek parpadelle ($25) is another new entrant worth waiting for. Silky pasta sheets act as the perfect vehicle to sop up a rich and meaty ragu stewed with tomatoes and smoked speck. A smattering of new sides have wound their way onto the menu too. For example, the baked scamorza ($6), a dangerously gooey puddle of melted cheese drizzled with honey. Last but not least, no trip to Casa Vostra is complete without a slice of its trademark Newpolitan pizza, dressed up this time with the sweet-savoury melange of Parma ham, fig puree, rocket, Parmigiano Reggiano, candied walnuts and Fior di latte mozzarella ($26). As always, the crust – whipped into shape by a long process of fermentation and baking – is perfectly airy and crisp. If its sweet undertones do not suit your palate, there is a steady selection of traditional flavours to pick from, all affordably priced and well under the $30 mark. Tip: Drop by from 2 to 5pm, the restaurant's off-peak hours. Check out ST's Food Guide for the latest foodie recommendations in Singapore.
Straits Times
4 hours ago
- Straits Times
Japan trade negotiator Akazawa says he made progress in US tariff talks
The latest round of talks may be the last in-person meeting between Japanese and US officials before the upcoming Group of Seven leaders summit. PHOTO: REUTERS Japan trade negotiator Akazawa says he made progress in US tariff talks TOKYO - Japan had made some progress in a fifth round of trade talks with US officials aimed at ending tariffs that are hurting Japan's economy, Tokyo's chief tariff negotiator said. 'Tariffs have already been imposed on autos, auto parts, steel and aluminium, and some of them have doubled to 50 per cent along with 10 per cent general tariff. These are causing daily losses to Japan's economy,' Mr Ryosei Akazawa, said in Washington on June 6 after talks with officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. Mr Akazawa declined to say what progress they had made. The latest round of talks may be the last in-person meeting between senior Japanese and US officials before the Group of Seven (G-7) leaders summit that starts on June 15, where US President Donald Trump is expected to meet Japanese Prime Minister Shigeru Ishiba. Japan also faces a 24 per cent tariff rate starting in July unless it can negotiate a deal with Washington. 'We want an agreement as soon as possible. The G-7 summit is on our radar, and if our leaders meet, we want to show what progress has been made,' Mr Akazawa said. 'Still we must balance urgency with a need to guard our national interests,' he added. In May, Japan's trade negotiator said US defence equipment purchases, shipbuilding technology collaboration, a revision of automobile import standards and an increase in agricultural imports could be bargaining chips in tariff talks. In a bid to reach an agreement with the US, Japan is also proposing a mechanism to reduce the auto tariff rate based on how much countries contribute to the US auto industry, the Asahi newspaper reported on June 6. Mr Akazawa said Japan's position has not changed and that the tariffs are not acceptable. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
5 hours ago
- Business Times
Japan trade negotiator Akazawa says he made progress in US tariff talks
[TOKYO] Japan had made some progress in a fifth round of trade talks with US officials aimed at ending tariffs that are hurting Japan's economy, Tokyo's chief tariff negotiator said. 'Tariffs have already been imposed on autos, auto parts, steel and aluminum, and some of them have doubled to 50 per cent along with 10 per cent general tariff. These are causing daily losses to Japan's economy,' Ryosei Akazawa, said in Washington on Friday after talks with officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. Akazawa declined to say what progress they had made. The latest round of talks may be the last in-person meeting between senior Japanese and US officials before the Group of Seven (G7) leaders summit that starts on June 15, where US President Donald Trump is expected to meet Japanese Prime Minister Shigeru Ishiba. Japan also faces a 24 per cent tariff rate starting in July unless it can negotiate a deal with Washington. 'We want an agreement as soon as possible. The G7 summit is on our radar, and if our leaders meet, we want to show what progress has been made,' Akazawa said. 'Still we must balance urgency with a need to guard our national interests,' he added. Last month, Japan's trade negotiator said US defence equipment purchases, shipbuilding technology collaboration, a revision of automobile import standards and an increase in agricultural imports could be bargaining chips in tariff talks. In a bid to reach an agreement with the US, Japan is also proposing a mechanism to reduce the auto tariff rate based on how much countries contribute to the US auto industry, the Asahi newspaper reported on Friday. Akazawa said Japan's position has not changed and that the tariffs are not acceptable. REUTERS
