Message from the President and CEO
Japan Finance Organization for Municipalities (JFM) is a joint funding organization established under the law of Japan, wholly owned by all local governments in Japan, with the objective of accurately meeting the funding needs of these governments by providing long-term, low-interest financing. With a solid financial foundation, JFM is dedicated to supporting the sound fiscal management of local governments and contributing to the realization of sustainable communities through its three core functions: lending, funding, and supporting local governments.
In light of recent developments in the financial market environment, domestically, the Bank of Japan’s interest rate hike has ushered in what is now referred to as a “world with interest rates.” Internationally, central banks in Europe and the United States have transitioned from tightening to easing their monetary policies, marking the beginning of a new phase in global finance. Furthermore, amidst an environment of heightened uncertainty—driven by factors such as the impact of U.S. tariff policies, political instability in various countries, and the emergence of geopolitical risks—the outlook for interest rates and exchange rates remains unclear. Nevertheless, JFM remains resolute in its commitment to fulfilling its prescribed role with precision and reliability, ensuring that it continues to meet the evolving needs of local governments in these challenging times.
First, regarding lending operations, as of the end of fiscal 2024, the outstanding loan balance is expected to reach JPY 22.7 trillion. In line with the Local Government Borrowing Programme, loans have been provided for high-priority projects for local governments, such as “Disaster Management and Mitigation Project”, “Depopulation Measure Project”, and “Child and Child-rearing Support Project”. In addition, loans are extended for projects closely
related to residents’ daily lives, such as “Water Supply and Sewage Project” and “Hospitals Project”. Moving forward, we will continue to utilize earnings from Public Racing (horse racing, bicycle racing, motorcycle racing, and speedboat racing), collected by the implementing bodies to reduce loan interest rates and provide low-interest financing to local governments.
To finance these loans, JFM primarily issues JFM bonds in the financial markets. As of the end of fiscal 2024, the outstanding balance of bonds and long-term bank loans is expected to reach JPY 19.2 trillion. To date, we have gained strong market confidence, accurately capturing investor demand in issuing bonds. Going forward, we will continue to respond flexibly and precisely to changes in the financial market environment, ensuring favorable financing conditions.
In regard to local government support, JFM aims to be a trusted advisor in the fiscal management of local governments. To achieve this, we implement various initiatives by organically linking three pillars: “Research and Studies”, “Personnel Training Support” and “Information Dissemination”. Notably, in its program to enhance the management and financial capabilities of local governments by dispatching advisors upon request, JFM will expand its support to include initiatives such as wide-area regional cooperation, digital transformation for tax administration, and Regional Revitalization 2.0, while significantly increasing the number of dispatched advisors. Moreover, JFM will actively and diligently conduct research studies and information dissemination activities that address urgent local policy needs, such as countermeasures against declining birthrates, depopulation, and the enhancement of child-rearing environments, thereby further contributing to the fiscal soundness and financial stability of local governments.
In addition, as part of its sustainability efforts, JFM will continue to issue Green Bonds both domestically and internationally, while incorporating ESG considerations into all of its business activities, including lending, funding, and local government support, thereby further contributing to the realization of sustainable communities.
All of us at JFM are fully committed to realizing our mission of “Supporting local governments through finance to create a future for regions.” We will continue to diligently carry out our work to accurately meet the funding needs of local governments through stable fundraising, and to further enhance our support services for them. Through these efforts, we aim to contribute to the sound fiscal management of local governments and the realization of
sustainable communities. We kindly ask for the continued cooperation and support of all relevant parties.
NAITO Hisashi
President and CEO
2025