Latest news with #TaroKitabayashi
CNA
22-05-2025
- Business
- CNA
Norinchukin Bank books annual loss of $12.63 billion on US and European bonds
TOKYO : Japan's Norinchukin Bank on Thursday reported a net loss of 1.81 trillion yen ($12.63 billion) for the year ended March 2025 as it sold off its portfolio of U.S. and European government bonds. The bonds had plummeted in value when interest rates in the U.S. and Europe began to rise from 2022 and remained higher for longer than anticipated. In June last year, Norinchukin Bank said it would sell down some of the bonds to stem the losses. Over the year it sold off 17.3 trillion yen ($120.94 billion) of low-yielding assets, mostly U.S. and European government bonds. Norinchukin had built up big positions in the bonds in search of higher returns during the years of negative interest rates in Japan. The bank is the principal financial institution for Japan's farm, forestry and fishery cooperatives and has a business model centred on securities investments rather than generating income from lending. As such it has not benefited from the rise in domestic interest rates that has been a boon for the banking sector. Japan's three largest banking groups posted record annual profits last week. Norinchukin said it still had 1.2 trillion yen of unrealised losses on its bond portfolio at the end of March this year, but forecast a profit of between 30 billion yen and 70 billion yen for its current financial year which ends in March 2026. "With uncertainty in the global economy, including from the Trump administration, there's no room for complacency," chief executive Taro Kitabayashi told a press briefing in Tokyo. Chief Financial Officer Masaki Nagano told the press briefing Norinchukin was not immediately impacted by the spike in yields of long-term sovereign bonds this week as the bank does not hold ultra long-term foreign bonds. But if the higher yields persist it could lead to unrealised losses and the bank would consider using interest rate hedges as a way of managing the risk, Nagano said. The bank has also become one of the world's largest investors in collateralised loan obligations (CLOs) and held 8.3 trillion yen worth of the securities at the end of March, according to its results presentation. Norinchukin had 40.3 trillion yen in market assets at the end of March, down from 59.5 trillion yen at the end of March 2022. ($1 = 143.3400 yen)
Reuters
14-04-2025
- Business
- Reuters
Japanese government bonds 'within range' as investment target, says Norinchukin's new head
TOKYO, April 14 (Reuters) - Japanese government bonds (JGBs) are now a natural investment target over the medium and long term for Norinchukin Bank as the return of inflation and higher interest rates have made them more attractive, its new chief executive said. Since last year, the Japanese investment heavyweight has been selling off tens of billions of dollars worth of foreign bonds after incurring massive losses on its holdings when interest rates in the U.S. and Europe rose higher than expected. High foreign exchange hedging costs also support JGB acquisitions, Taro Kitabayashi told Reuters in an interview. He added it was too early to say how President Donald Trump 's imposition of tariffs and the resulting impact on the global economy would affect Norinchukin's portfolio. Norinchukin, Japan's main financial institution for farm, forestry and fishery cooperatives, is one of Japan's largest institutional investors and its strategy is closely watched by market participants. Foreign government bonds had previously made up around 50% to 60% of its around 45 trillion yen ($315.50 billion) of market assets, Kitabayashi said, as it sought out higher returns abroad over the years of ultra-low interest rates in Japan. In the nine months ended December 2024, it sold off 12.8 trillion yen of low-yielding assets, mostly U.S. and European government bonds. In their stead, Norinchukin is considering new investments, including in JGBs, equities, real estate, private equity and infrastructure, but has not set targets, Kitabayashi said. "We could scarcely invest in Japanese government bonds when interest rates were negative and low, but now interest rates are higher, they naturally count as among our investment targets," Kitabayashi said. It expects to book a 1.9 trillion yen loss for the 12 months ended on March 31, but has forecast a modest profit of between 30 billion and 70 billion yen in the year to March 2026 on returns from new investments and higher interest rates in Japan. ($1 = 142.6300 yen)
Bloomberg
14-04-2025
- Business
- Bloomberg
Norinchukin Dodges Trump's Market Chaos After Selling Treasuries
Norinchukin Bank's disastrous last fiscal year has had one silver lining for Japan's $300 billion investing giant — it helped shield it from the turmoil unleashed by Donald Trump's tariffs this month. New Chief Executive Taro Kitabayashi said the bank finished selling off its unprofitable US Treasury holdings by the end of March, thus avoiding the volatility last week as Trump's trade policies whipsawed markets. Through the end of December, the bank had unloaded ¥12.8 trillion of its holdings in US and European government bonds. The bank is not currently doing any large-scale buying or selling of sovereign debt, he said.
