Message from the President and CEO
JFM is a joint funding organization established under the law of Japan, which is wholly owned by all Japanese local governments, with the objective to provide long-term and low-interest funds for local governments.
First, we would like to extend our heartfelt condolences to all those affected by the 2024 Noto Peninsula Earthquake and the 2024 Noto Peninsula Heavy Rain in September and offer our sincerest sympathies to all those affected. Our organization, in coordination with the government, will appropriately support the affected local governments in securing funds for recovery and reconstruction without any obstacles.
In fiscal 2023, despite expectations of a significant slowdown in the global economy due to prolonged Russian military aggression, escalating tensions in the Middle East, and resultant surges in energy and raw material prices, alongside inflation and financial tightening, especially in Western countries, the overall trend remained resilient. In Japan, there were positive economic movements, such as the highest wage increases in 30 years. Additionally, at the Bank of Japan’s Monetary Policy Meeting in March 2024, the decision was made to lift the negative interest rates for the first time in 17 years, marking a new phase in monetary policy.
In June of fiscal 2024, the European Central Bank decided to cut interest rates for the first time in four years and nine months, followed by an additional cut in September. Similarly, in the United States, a rate cut was implemented in September for the first time in four and a half years, signaling a turning point in the monetary tightening phase in Europe and the U.S. On the other hand, in Japan, an additional rate hike was implemented in July, signaling a rising trend in long-term domestic interest rates. It will be crucial to closely monitor the policies of governments and financial authorities both domestically and internationally. Our organization will also remain keenly aware of these circumstances, flexibly and appropriately implementing various projects to ensure stable business continuity.
Regarding lending operations, we will provide loans tailored to the financial needs of local governments for various projects, including the newly established “Child and Child-rearing Support Project,” the increasing “Disaster Management and Mitigation Project,” and the “Decarbonisation Promotion Project.”
For funding procurement, we will achieve stable procurement by utilizing diverse funding methods, such as issuing new domestic Green Bonds. Moreover, in our local support operations, we will enhance our initiatives, such as adding “Local Government GX” to the support areas of the “Management and Financial Management Enhancement Project,” a joint project with the Ministry of Internal Affairs and Communications.
Additionally, concerning our management account reserve for interest rate volatility, 200 billion yen will be transferred to the national government to secure the total amount of local allocation tax. Combined with the 30 billion yen increase in forest environment concession tax, a total of 230 billion yen will be transferred to the national government.
Our organization is strengthening and promoting our commitment to sustainability. Under the mission of “Supporting local governments through finance to create a future for regions,” we will contribute to the sustainable development of local communities by considering ESG perspectives in all our business activities, including lending, funding procurement, and local support.
As a joint funding organization, we will continue to steadily meet the financial needs of local governments through stable funding procurement that is responsive to changes in financial conditions and meticulously enhancing our local support operations. We aim to contribute to the sound financial management of local governments and the realization of sustainable local communities. We appreciate the cooperation and support of all concerned parties.
NAITO Hisashi
President and CEO
2024