(Bloomberg) -- Concerns about Silicon Valley Bank’s failure are “extremely unlikely” to spread to Japan, according to the nation’s top regional banker.

Renewed worries about a US recession in the wake of the lender’s collapse, and waning expectations for early rate hikes by the Bank of Japan contributed to a selloff in the stocks of local lenders in recent days, Tsutomu Yonemoto, chairman of the Regional Banks Association of Japan, said at a briefing on Wednesday. 

The sudden plunge came after bets on a shift in central bank policy - which would lift lending margins - boosted Japan’s financial stocks in recent months.

On Wednesday, most banking stocks rose across Asia Pacific as concerns over a broader fallout from Silicon Valley Bank’s sudden collapse eased. Japanese shares dominated the leaderboard, as the Topix Banks Index gained 3.3%, paring its 16% drop over the previous three sessions. 

Japanese Finance Minister Shunichi Suzuki said it was unlikely that a collapse such as SVB’s would happen in the country, and there was no need to provide liquidity like in the US. Still, Bank of Japan Governor Haruhiko Kuroda told parliament that there’s a need to carefully watch for any impact from SVB’s collapse.

Authorities have been rushing to stem the fallout and assure investors as the SVB crisis drove attention to unrealized losses related to bond and equity holdings at lenders globally.

Although SVB is an idiosyncratic event, there is also now renewed awareness of such paper bond losses, Yonemoto said.  

Japanese publicly traded regional banks had 1.4 trillion yen ($10 billion) in unrealized losses on foreign bonds and other securities as of Dec. 31, according to SMBC Nikko Securities Inc. analyst Masahiko Sato.

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