Japan’s top three banks will stop trading in USD with Russia

The three banks mentioned above are MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corp. is doing transactions in USD with Sberbank through the US. The disruptions could force Japanese businesses operating in Russia to seek alternative payment channels such as non-US banks.

The US put Sberbank on the sanctions list in February and the ban on dollar transactions with the bank took effect on March 26.

Sberbank is not among the Russian banks excluded from a key international payment system, SWIFT. Many Japanese businesses operating in Russia have used Sberbank when making payment transactions.

The three Japanese banks mentioned above have stopped transactions with other major Russian banks, including the country’s second largest bank, VTB Bank, which was removed from SWIFT on March 12.

MUFG Bank, the core banking division of Mitsubishi UFJ Financial Group Inc., will also stop transferring funds to Sberbank in other foreign currencies.