Japan says banking system stable, not contagion

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Japan says banking system stable, not contagion

Hirokazu Matsuno, Chief Cabinet Secretary Hirokazu Matsuno said on Monday that Japan's banking system is stable and that it won't see a contagion from U.S. and European banking sector woes.

He also welcomed Sunday's decision by top central banks, including the Bank of Japan BOJ, to increase the global flow of cash by expanding an existing swap line to ensure lenders have enough dollars needed to operate.

As risk-aversive moves were seen in financial markets, each country ramped up efforts, Japan's top government spokeswoman told a regular news conference.

Japan's financial system is stable as a whole, he said, and authorities were watching financial market moves with a sense of alarm. Finance Minister Shunichi Suzuki told reporters that the government would continue to assess the impact of a weekend rescue deal for Credit Suisse Group on Japan's financial sector.

Asian stocks steadied and U.S stock futures increased on Monday in relief from a weekend rescue deal for Credit Suisse and concerted central bank action, though trade was tense and volatile as contagion fears stalked financial shares.

Japanese policymakers have brushed aside the possibility of a contagion in Japan, saying domestic banks have enough capital buffers to absorb losses caused by various external factors, including the risks from the collapse of U.S. lenders.