Mitsubishi UFJ Financial Group, Inc.

It was learned on the 17th that MUFG Bank is moving toward finalizing its internal stance in the near future regarding lending to defense-related companies. The direction is to judge the feasibility of lending on a case-by-case basis according to growth potential and other factors, while taking into account whether such lending is consistent with the government's security policy. The defense industry is one of the 17 fields that the government has positioned as a strategic investment target in its growth strategy, and a policy has been set out to support startups and others through public-private investment with the aim of strengthening the technological and production foundations for dual-use goods such as drones.

Singapore's DBS and U.S.-based Citi announced on September 7 that they can now facilitate cross-border U.S. dollar payments around the clock, 365 days a year, using tokenized deposits. On Saturday, September 5, the two banks executed a weekend dollar transfer between Singapore and the United States, with the transaction via tokenized deposits on SWIFT's digital ledger completed in minutes. This was not a pilot but a real transaction, demonstrating that bank operating hours are no longer a constraint on settlement. DBS predicts that cross-border payments originating from Asia will double to $24 trillion by 2033. In the banking industry, the approach of connecting to existing payment networks without replacing them is gaining ground, with SWIFT's ledger serving as a bridge between banks' tokenized deposits, while final settlement still goes through traditional systems. This is the second cross-border settlement following HSBC and Standard Chartered in August. For the crypto industry, this means regulated bank money is now directly competing with the 24/7 settlement advantage of stablecoins. However, Citi also joined the joint issuance of a dollar-denominated stablecoin by 21 global companies announced on September 1, indicating that major banks are pursuing both avenues. In Japan, MUFG Bank is participating in a pilot program involving 17 banks for real transactions on the SWIFT ledger, and the three megabanks aim to start real transactions of trust-type stablecoins in the fiscal year 2026.

On September 3, Mitsubishi UFJ Asset Management, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Trust Bank, and Progmat announced that they had, for the first time in Japan, actually established a domestically domiciled tokenized investment trust and begun verification in a real operating environment. The four companies set up the investment trust for verification purposes on August 31, contributing 200 million yen of their own funds to invest in short-term government bonds with remaining maturities of three months or less. They will not solicit or sell to external investors, but will verify a range of functions including management, custody, rights administration, and tokenization infrastructure in a real environment. Tatsuya Saito of Progmat explained that the aim of tokenization is not merely 24-hour trading, but to connect with digital money such as stablecoins and tokenized deposits, linking investment management, settlement, and collateral use. For domestically domiciled investment trusts, there is a legal premise that beneficiary interests are represented by certificates called beneficiary securities, and the transfer of rights is not completed solely by token transfer, but the four companies plan to advance real operations and institutional development as a reciprocal process.

In the foreign exchange market on the 27th, the yen traded in the upper 159 range against the dollar, slightly weaker than the previous evening. US yields rose following US price indicators, making dollar buying dominant. Bonds are expected to start lower. Mizuho Bank's Hisao Hasegawa said about the US Personal Consumption Expenditures (PCE) that "the market understood that inflation is slowing slowly," and regarding the dollar's strength, he commented, "Since a strong result was within expectations, it was surprising that it reacted this much." Nomura Securities' Yujiro Goto pointed out that Bank of Japan Deputy Governor Ryozo Himino's speech is "highly important for gauging BOJ policy and the yen's direction," and said the focus is on whether there will be a positive stance toward rate hike discussions. In the bond market, Mitsubishi UFJ Asset Management's Masayuki Oguchi noted that views of a faster BOJ rate hike pace are capping bond prices, and the September futures contract, the leading month, closed at 126.42 yen.

Analysts view the joint currency market intervention by Japan and the United States to support the yen as only a temporary measure, while fundamentals continue to pressure the yen weaker. Atsushi Mimura, Japan's Vice Finance Minister for International Affairs, said the joint action represents the highest level of currency cooperation between the two countries, and authorities are ready to act again if necessary. The intervention amount on Friday, July 31, may have been a record, with market watchers estimating around 5 trillion yen, while a Bloomberg analysis suggests Japan likely spent about 34 billion dollars. Many analysts also point out that the intervention only buys time, given concerns over the government's fiscal position from Prime Minister Sanae Takaichi's spending policies and the Bank of Japan's continued slow pace of rate hikes. US Treasury Secretary Scott Bessent referred to monetary policy measures to address the yen being undervalued relative to fundamentals, which was interpreted as a reference to the Bank of Japan's monetary policy. Markets are watching how much pressure the US will put on the Bank of Japan to accelerate rate hikes, with Teppei Ino, head of analysis at MUFG Bank, saying the possibility of a Bank of Japan rate hike at the September meeting has become much clearer.

AZ-COM Maruwa Holdings, a major Japanese logistics company, will adopt the JPYC stablecoin to pay fees and salaries to approximately 2,300 business partners and independent contractors, including truck drivers. This marks the first large-scale corporate use of JPYC, the first officially registered yen-pegged stablecoin in Japan. AZ-COM Maruwa is also considering a 1 billion yen investment in JPYC Inc. to foster collaboration. The offer of faster payments aims to attract partners and address labor shortages stemming from an aging society and stricter overtime regulations. The circulating supply on JPYC's network has already exceeded 2 billion yen, and Lawson, Japan's third-largest convenience store chain, recently launched a pilot program accepting JPYC payments. Meanwhile, Metaplanet Ventures invested 400 million yen in JPYC Inc.'s Series B round. Traditional financial institutions are also competing in the stablecoin market, with SBI Group launching JPYSC and the three megabanks MUFG, SMBC, and Mizuho planning to begin transactions with a jointly issued stablecoin by fiscal year 2026.