That Japanese banks would ever be in a position to bail out British financial institutions would have seemed impossible less than 10 years ago.

Until recently Sumitomo Mitsui Financial Group was repaying billions of yen worth of government loans it received in the late 1990s, after losing huge sums on bad debts and needing an emergency cash injection to survive.

But it is not the first time in recent months that Japan's banks have come to the rescue of Western companies in the wake of the credit crunch. In January Mizuho Financial injected Y130 billion into Merrill Lynch and Japan's top banks have said that they are sitting on a $10 bilion cash pile, ready to help ailing banks.

Barclays has already proved that it has a talent for useful Asian tie-ups. Last year, just when everyone was wondering how the bank could possibly improve its offer for ABN Amro, the bank pulled a cash injection from China Development Bank and Temasek out of the hat. This year the conversations do not appear to have gone as smoothly, with its two existing Asian investors nursing a 50 per cent-plus fall in the value of their stakes and most other sovereign wealth funds stung by the slide in bank stocks.

It is not known whether the cash injection from Sumitomo is dependent on Barclays agreeing the rest of the £4 billion increase it is thought to be looking for. But even the fact that talks have progressed this far has to be good news.

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