Japan Post Bank Co. stands to lose the most from the Bank of Japan¡¯s decision to introduce negative interest rates as plummeting bond yields underscore its reliance on the country¡¯s debt for income.
The postal bank, one of the biggest holders of Japanese government bonds, gets more than 90 percent of its profit from interest income, according to Shinichiro Nakamura, a Tokyo-based senior analyst at SMBC Nikko Securities Inc. He sees the company¡¯s earnings taking a bigger hit from the BOJ¡¯s action than the nation¡¯s three so-called megabanks, which unlike Japan Post have been expanding abroad and diversifying into fee businesses.
¡°Domestic yields will deteriorate due to the introduction of negative interest rates,¡± Nakamura said by phone. ¡°And the larger the proportion of domestic interest income in profit, the larger the negative impact.¡±
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