Japan estimates subprime losses at $8 billion

TOKYO — Japanese banks are saddled with $8 billion in losses linked to the bad housing credit problem in the United States, the government said Friday, a number that's still small compared to counterparts there and in Europe.

Data from the Financial Services Agency showed the losses at Japanese banks caused by the subprime mortgage crisis in the U.S. had ballooned 41 percent by the end of the first quarter, compared with 600 billion yen ($5.7 billion) at the end of December.

The agency also said banks and other lenders hold 1.019 trillion yen ($9.6 billion) in subprime-related products, down from 1.519 trillion yen ($14.3 billion) in December.

When combining losses that are indirectly related to the subprime mortgage crisis, the losses widen to as much as 2.436 trillion yen ($23.0 billion), the government said.

Japan is feeling the global fallout from the U.S. credit woes, but more serious risks may come from declining exports caused by economic slowdowns in the U.S. and Asia. Rising oil and raw material costs are also weighing on the world's second largest economy.

Earlier this week, the Organization for Economic Cooperation and Development said Japan's growth will be moderate this year at 1.7 percent. Japan's economy grew 1.5 percent in the fiscal year ended March 31, a drop from growth of 2.5 percent the previous fiscal year.

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