SoftBank risks triggering yen rally with T-Mobile share sale

Jun 18, 2020 | News On Japan

Jun 18, 2020 (Nikkei) - SoftBank Group's planned 4.5 trillion yen ($41.9 billion) asset sale has fueled fears in the currency market of renewed volatility in the yen, which has enjoyed relative stability underpinned by aggressive Japanese investment broad.

Billionaire Masayoshi Son's Japanese technology group said Tuesday it has started exploring options to sell or "monetize" shares in U.S. wireless carrier T-Mobile as part of its asset reduction, which was first unveiled in March.

The move would mark a major reversal in Japanese investment overseas, which has grown by 50 trillion yen over the past five years and served as a check against a rising yen -- a traditional risk for export-driven companies in Japan. SoftBank's announcement comes at a time when manufacturers are weighing changes to their global supply chains in light of the coronavirus pandemic.

"We are on guard for outbreaks in dollar selling," said a currency dealer affiliated with a banking group.

SoftBank, which suffered a nearly 1 trillion yen net loss in the year to March, is looking to cut its debt. The company on Tuesday gave "no assurance" that any transaction would take place involving its T-Mobile stake, worth well over 2 trillion yen. It is also unclear whether such a transaction would entail any dollar-to-yen conversions.

But SoftBank is not the only company suffering a reversal of fortunes in the pandemic. Listed Japanese companies saw net profits fall roughly 30% in the fiscal year to March. Any drop in foreign investment flows would have an effect on exchange rates.

The balance of foreign direct investment by Japanese interests grew to roughly 169 trillion yen at the end of 2019. The flow of outbound investments started rising in 2012 as Japanese companies faced the prospect of a shrinking, graying population at home. Foreign direct investments outstripped foreign securities holdings in 2014.

Unlike securities holdings, corporate acquisitions and similar direct investments usually represent long-term commitments, so the foreign exchange transactions they entail also are not soon unwound.

Typhoons No. 28 and 29 Bring High Waves to Japan's Pacific Coast

Two typhoons moving across the Pacific southeast of Japan are expected to remain well away from the Japanese mainland, but powerful swells could bring rough seas to a wide stretch of the country's Pacific coastline throughout the three-day holiday weekend, according to forecasts updated at 3 a.m. on October 10.

Cyberattacks Spread Across Japan

A series of cyberattacks has disrupted business operations and exposed millions of customer records across Japan, with a ransomware attack on a cloud service provider affecting 495 companies and local governments nationwide, while convenience store operator Lawson has disclosed a separate breach involving more than 2.15 million personal information records.

Japan's First 360-Degree Projection Mapping Opens in Osaka

Japan's first 360-degree projection mapping show will open at the Osaka City Museum of Fine Arts on October 10, transforming the historic building into an immersive world of light, music, and seasonal imagery, with organizers hoping the attraction will also help stimulate the city's nighttime economy.

Tokyo University Professor Wins Nobel Prize in Chemistry

Tokyo University of Science professor emeritus Kenzo Soai has been awarded this year's Nobel Prize in Chemistry together with French chemist Henri B. Kagan for discoveries that transformed scientists' understanding of how chemical reactions can favor one of two mirror-image forms of a molecule.

US Military Halts All Okinawa Operations for 48 Hours

The US military suspended activities by all forces stationed in Okinawa for 48 hours from noon on October 7, an unusual measure following the arrest of a US Marine in connection with a robbery and murder case that has renewed scrutiny of crimes involving American service members.

MEDIA CHANNELS

MORE Society NEWS

Most Sightings of Fugitive Yoichi Hatta Reported in Kanto

Police in Oita Prefecture have revealed that the Kanto region accounts for the largest number of reported sightings of Yoichi Hatta, a fugitive wanted in connection with a fatal hit-and-run incident in Beppu in 2022, with authorities preparing to distribute new wanted posters nationwide from November as the search enters its fifth year.