Japan’s three largest megabanks are poised to increase their lending profitability thanks to the Bank of Japan’s recent normalization of monetary policy. Since March 2024, the central bank has raised interest rates three times, which bodes well for banking margins. This policy shift signals a departure from the longstanding negative interest rate regime, allowing banks to thrive in a more favorable lending environment. Investors should monitor how these changes impact financial markets and the broader economy, as the adjustments may lead to significant benefits for major financial institutions in Japan.