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Business trends

$1tn in dollar exposure has Japanese banks in deep water

Lenders, in reach for yield, make selves vulnerable to Lehman-like shock

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Japanese flags flutter in Tokyo's business district.   © Reuters

TOKYO -- Japanese banks are pursuing a dangerous strategy of loading up on foreign assets with money borrowed from overseas, a global banking watchdog has warned.

Their net holdings of dollar assets have doubled to about $1 trillion since before the Lehman shock in 2008, according to data released this week by the Bank for International Settlements.

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