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Japan Post stocks fell below IPO levels

Staff writer |
The stock prices of Japan Post Holdings Co. and its two financial units have been on a downward trend since the beginning of January.

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Shares of Japan Post Bank Co. — Japan Post Group's top earner — have fallen below their initial public offering price. The drop was prompted by the declining yields of government bonds, the bank's major means of investment.

Japan Post Holdings reported Friday that its consolidated after-tax profit in April-December fell 5.3 percent from a year before to ¥383.1 billion.

A main factor in the holding company's declining profits is the extremely low interest rate, which has made it difficult for Japan Post Bank to secure a profit margin through the investment of postal savings funds.

Japan Post Bank held about ¥178 trillion in deposits as of the end of December, which far surpasses the deposits of megabanks.

However, Japan Post Bank is not allowed to operate a loan business for individual customers and companies in principle because it is indirectly financed by the government. The bank's main source of revenue is its gains from investments in securities.

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