TOKYO, Reuters Japan39;s three biggest banks forecast record income in the coming year on Wednesday, signalling increased optimism about an economy that has only just exited from years of negative interest rates.

The results from Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group also show how Japanese banks are benefiting from higher interest rates in overseas markets, such as the United States, as well as a weaker yen, which inflates profits when earnings from abroad are brought home.

For years Japan39;s big banks have been squeezed by the central bank39;s massive monetary stimulus, including negative interest rates. The Bank of Japan in March raised interest rates for the first time in more than a decade and a half, heightening expectations that banks will be able to make more money from lending.

We are entering a world with interest rates, which is a plus for us, MUFG39;s group chief executive, Hironori Kamezawa, told reporters.

For the current year, Mitsubishi UFJ expects a net profit of 1.5 trillion yen 9.6 billion, a slight increase over the year just ended which saw profit jump by a third to a record.

He said the fullyear results, which the banks focus on rather than quarterly numbers, were extremely strong.

Likewise, secondranked SMFG forecast a record fullyear net profit of 1.06 trillion yen the first time it will exceed the 1 trillion yen mark and thirdranked Mizuho projected a record 750 billion yen. Both of…