Japanese lenders are relocating staff from Middle East offices as US regulators signal potential easing of capital rules and markets respond to an Israel–Iran ceasefire
Japan’s largest banks have begun relocating staff and their families from parts of the Middle East amid escalating geopolitical uncertainty. Financial institutions worldwide are reevaluating their operational risk exposure and capital strategies in response.
According to Reuters, Sumitomo Mitsui Financial Group (SMFG) has evacuated employees from Iran and Qatar, while Mitsubishi UFJ Financial Group (MUFG) is relocating family members from its offices in Dubai and Riyadh. Mizuho Financial Group continues to monitor the situation and is reviewing contingency plans across the region.
These measures follow warnings from Japan’s Foreign Ministry, which advised increased caution due to rising regional tensions. The evacuations come despite a ceasefire announcement on 23 June by US President Donald Trump, who described it as a “forever ceasefire” between Israel and Iran.
Oil prices fell nearly 3% after the announcement, offering some relief to global markets after weeks of volatility. Still, while short-term tensions have eased, the banking sector remains cautious.
The actions by Japanese lenders coincide with broader regulatory shifts. On 23 June, US Federal Reserve vice chair for supervision Michelle Bowman signalled that the central bank is preparing a comprehensive overhaul of capital rules. The changes are expected to affect leverage ratios to include global systemically important bank (G-SIB) surcharges and thresholds for regional banks.
The potential easing of capital rules comes at a time when banks are reassessing geopolitical exposure, cost of compliance and cross-border staffing strategies. In parallel, Fed officials including Bowman and Governor Christopher Waller have indicated that a July rate cut is under consideration if inflation continues to moderate.
Given their deep corporate and correspondent ties across the Gulf and broader Middle East, Japanese banks’ regional repositioning could carry significant operational and reputational consequences. MUFG, SMFG, and Mizuho have all expanded their footprints in the UAE and Saudi Arabia in recent years to better support Japanese corporate clients abroad.
The Bank of Japan has not issued a formal statement regarding the developments.
