JAPAN POST’S PRIVATISATION IS ON SCHEDULE, BUT US EXPRESSES CONCERNS

Preparations for the privatisation of Japan Post and its division into four groups are on track to take place in October, the operation’s president Masahuru Ikuta said yesterday. Japan Post must make a final decision on its privatisation schedule by March 1, with a six-month postponement permissible if there are technical delays. An official decision is expected on February 21. Meanwhile the US has increased the stakes on the privatisation, with trade representative Susan Schwab stating that the US was prepared to resort to litigation if US financial services groups were put at an unfair disadvantage. US life assurers have expressed concerns that the ¥114tn life company created through the split could use the fact that it was 100%-government owned — a situation which will remain in place until the operations are listed around 2010 or 2011 — to exploit moves into new product areas, such as variable annuities, where foreign assurers have been strong. Nobuyuki Kinoshita, director-general of the Office for the Promotion of the Privatisation of Postal Services, claimed that “it is impossible for US financial services groups to be unfairly disadvantaged” becaue the postal privatisation law dictated that Japan implement measures to ensure equivalent levels of competition.