Japan firms post Y1.9 trillion in subprime losses!

Exposure dragged down financial firms in fiscal year that ended in March

SAN FRANCISCO, California – June 1, 2008 - Japanese financial institutions incurred losses totaling more than 1.9 trillion yen ($18 billion) from exposure to U.S. subprime mortgages in the Japanese fiscal year which ended March 31, according to a published report.

Roughly 50 banks, brokerages, insurance firms and other financial institutions reported losses on subprime-related investments for fiscal 2007. Market instability resulting from the subprime mess compounded the impact, with securities not backed by subprime mortgages also affected, business daily Nikkei said on its Web site in a report dated Monday.

With declines in asset-backed securities prices taking a breather, additional write-downs for this fiscal year are likely to be limited, the report said.

Mizuho Financial Group Inc. had the largest loss at 645 billion yen. By sector, the top eight banks had combined losses exceeding 1 trillion yen, accounting for more than half the total, Nikkei said.

:Nomura Holdings Inc reported 260 billion yen in losses. Both Mizuho and Nomura were involved in the asset-securitization business in the U.S. and Europe, widening their losses.

The insurance sector was hit with a combined 300 billion yen of red ink, while regional banks and credit unions booked just under 60 billion yen in losses, the report said.