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This paper examines bank merger waves in Japan and their effect on competition in the Japanese commercial banking market for the period of 1983-2006. The H-statistic of the Panzar-Rosse model is estimated separately for three different time periods, the boom, the bubble burst and the recovery. This paper concludes that the bank mergers that took place in Japan have not led to a higher level of market power except for the period of financial crisis brought by the bubble burst. Recent mergers in the Japanese banking sector do not seem to harm the competition level in the banking market. Contrary to the decreasing trend of Chinese banks’ overall market concentration, the Japanese and Korean banking industries share commonality in their merger activities and market concentration trend, that is, an increase in bank mergers, creation of mega banks and an increase in overall market concentration. Even with a decrease in market concentration, the Chinese banking industry is still highly concentrated and its level of competition is close to oligopoly, whereas both the Japanese and Korean banking industries have a market structure of monopolistic competition. The city banks in Japan tend to be more competitive than its Korean counterpart while the Korean regional banks are more competitive than its Japanese counterpart.