Banking Shares in Japan fell Thursday after troubles at Credit Suisse sparked fears that banking turmoil is spreading around the world.
On Thursday morning, Japan’s Topix Banks Index, a major index that tracks Japanese lenders, plummeted as much as 6.4%. It then compressed some losses and was last traded 4.3% lower. The index has lost more than 8% so far this week.
In South Korea, major lenders Shinhan Financial Group and KB Financial Group fell 1.7% and 0.7% respectively.
The Japanese benchmark Nikkei 225 fell as much as 2.2% in early trading. It was down 1.2% last trade. The Korean Kospi fell as much as 1.4%, but then reversed all losses and traded flat.
The Korean won weakened sharply against the US dollar, falling nearly 1% in morning trading as investors piled into traditional safe-haven currencies like the greenback.
Hours after the Swiss central bank announced on Wednesday that it was willing to provide credit to Credit Suisse, the beleaguered megabank accepted the offer, hoping to reassure investors that it had the money it needed to stay afloat.
Credit Suisse said it would borrow up to 50 billion Swiss francs ($53.7 billion) from the Swiss National Bank. The bank called the loan a “decisive action to pre-emptively strengthen liquidity”.
In Europe and New York, banking shares were then hammered on Wednesday shares in Credit Suisse fell as much as 30%, startling investors already reeling from the rapid collapse of two US banks within a week.