Japan’s Topix drops 2%; Asia-Pacific markets fall as Credit Suisse adds to banking fears

Japan’s shunto wage negotiations concluded Wednesday, Reuters reported – marking the biggest pay rises not seen in decades as inflation levels rise.

Analysts polled by Reuters expected to see a boost of roughly 3% in overall wages for the economy, marking the largest increment since 1997.

Prime Minister Fumio Kishida has called for better pay for workers in Japan, citing a weakened currency and higher levels of commodity prices leading to raised import costs in an overall high inflation environment, the report said.

– Jihye Lee

First Republic Bank is considering options to shore up liquidity including a sale of the lender, Bloomberg reported, citing people with knowledge of the matter.

The bank is expected to draw interest from its rivals and no decision has been made, the report said.

Shares of the bank rose 3.92% in after hour trading in U.S. Wednesday evening – after seeing a rise of more than 20% earlier in the week alongside regional banks.

Goldman Sachs on Wednesday lowered its 2023 economic growth forecast by 0.3 percentage points to 1.2%, citing a pullback in lending from small- and medium-sized banks amid turmoil in the broader financial system. 

Analysts expect that small banks will attempt to preserve liquidity in case they need to meet depositor withdrawals, leading to a substantial tightening in bank lending standards that could weigh on aggregate demand. “Small and medium-sized banks play an important role in the US economy,” they wrote.

Banks with less than $250 billion in assets comprise about 50% of U.S. commercial and industrial lending, the firm noted. Click here to read more.

— Pia Singh

The Swiss National Bank said Wednesday that it will provide…