Tag: Japan

The government has decided not to impose restrictions on foreign ownership of three entities to be created following the privatization of Japan Post, government sources said Sunday.

The decision reflects the government’s resolve to ensure the market mechanism works at the privatized companies, the sources said, adding equity restrictions on these entities would trigger a backlash from foreign investors eyeing the privatized Japan Post business in Japan.

Under a 10-year privatization plan starting in April 2007, Japan Post is to be divided into four entities, mail delivery, postal savings, life insurance and post office management, all to be run under a holding company.

The government is not considering any equity restrictions aimed at foreigners for the entities in charge of postal savings, insurance and the holding company, the sources said.

The Japanese government may consider cutting mail deliveries from daily to every other day in some districts when it privatises the post office in 2007, an adviser to the sell-off said.

Any proposal to dilute the post’s “universal service” could enrage the public and provoke parliamentary opposition to the sale, which will be discussed in what is expected to be a charged Diet debate in March.

Most Japanese – including many within the Liberal Democratic party of Junichiro Koizumi, the prime minister – see the network as a vital service.

As well as delivering mail through a dense branch network, the post office is the biggest financial institution in the world, with assets of Y350,000bn (Dollars 3,418bn) in its savings and insurance arms. It employs one in three civil servants.