With almost 80% of all its loans being held by Japanese customers, the health of Japanese economy impacts MTU's earnings. Similar, its investment portfolio primarily holds Japanese stocks and bonds, so a weak Japanese economy hurts MTU's earnings. With the Nikkei at its 1981 levels, the soft equity prices translates into declining income.
Significant government intervention increases the likelihood of more goverment oversight and banking guarantees specified by certain governments create artificial competitive advantages. The current financial crisis may not head anytime soon, and when it does, the financial landscape will be substantially different.
With the global unwinding of the popular carry-trade, the Yen's value has spiked compared to currencies outside the US Dollar. For borrowers of loans designated to be paid back in yen that did not hedge their currency risk are susceptible to default as their repayment burden increases. Loan losses will hurt MTU's bottom-line.