Granular Insights into Depositor Dynamics and Deposit Spreads in Japanese G-SIBs' Foreign Currency Deposits
September 25, 2026
SUDO Kakeru*, FUNADA Naoki**, OKUMA Ryoichi
Financial System and Bank Examination Department
*Currently at the Financial Services Agency
**Currently at the Personnel and Corporate Affairs Department
Abstract
Major Japanese banks are increasingly focusing on foreign currency deposits for stable funding of overseas lending. Against this background, this paper provides a quantitative analysis using granular data on foreign currency deposits at major banks. Specifically, it decomposes recent developments in overall deposit balances into depositor dynamics to characterize their pattern, identifies factors affecting depositor attrition and tenure length, and examines the determinants of deposit spreads -- metrics for assessing deposit acquisition costs. The results confirm that recent deposit growth is driven by existing non-Japanese depositors adding to their balances. Furthermore, expanding transaction banking services that attract transactional deposits contributes to containing depositor attrition, extending tenure, and lowering deposit acquisition costs. Using these findings to engage in further discussions with major banks and foreign authorities will be important for enhancing foreign currency funding stability and advancing monitoring methods.
Notice
The Bank of Japan Review Series is published by the Bank to explain recent economic and financial topics for a wide range of readers. This report, 2026-E-12, is a translation of the Japanese original, 2026-J-10, published in July 2026. Views expressed are those of the authors and do not necessarily reflect those of the Bank. If you have any comments or questions, please contact Financial Institutions Division III, Financial System and Bank Examination Department (E-mail: emu-.fsbe51_post@boj.or.jp).