Japanese Bank Stocks Poised for Rebound After Steep Selloff

Japanese bank stocks experienced a significant decline, surpassing the broader market drop, despite the Bank of Japan`s interest rate hike which is typically positive for bank profits. This decline was driven by fears of a global recession and the Bank of Japan`s potential for further rate increases, shocking investors who anticipated a pause. This unexpected move led to a sell-off in Japanese government bonds and bank shares, particularly by hedge funds that had bet on the opposite outcome. However, analysts believe that bank stocks are now poised for a recovery due to attractive dividends and reduced selling pressure from hedge funds.