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Economy

Pricier dollars may force overseas retreat by Japan banks: IMF

WASHINGTON -- Major Japanese banks could be forced to curtail their offshore investment as higher dollar-funding costs erode profits, the International Monetary Fund warned Wednesday.

Japanese banks face "a number of challenges to their business models," the IMF said in its semiannual Global Financial Stability Report. Japan's three megabanks stepped up overseas lending after the 2008 financial crisis, filling the gap left as troubled U.S. and European financial institutions pulled back. Foreign assets made up 16.7% of major banks' holdings in 2015, up from 12% in 2010.

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