Japan Post Holdings

Privatization of the postal system in Japan was first considered in the 1980s under Prime Minister Nakasone,[14] who, amid concerns about the government deficit, oversaw the privatization of three major public corporations: Japan National Railways, Nippon Telegraph and Telephone (NTT), and Japan Tobacco.[14][15] These discussions did not proceed, and in 1997 the issue of privatizing Japan Post Bank specifically was raised again under Prime Minister Hashimoto. This time, opposition from within the ruling and opposition parties resulted only in reforms aimed at improving financial discipline that fell short of actual privatization.[14][16]

In 2001, during an economic downturn in Japan, LDP politician Junichiro Koizumi took office with significant public support to privatize the postal system.[16][17] Benefits of privatization that were touted by supporters included efficiency of the financial sector, reducing political influence in the use of postal savings, and reducing bureaucratic mismanagement of funds. Detractors, including the postal lobby were concerned that privatization would shrink the universal availability of postal services in Japan, losing to job losses and the closing of rural post offices.[14]

Prime Minister Koizumi quickly established a commission to examine privatization of the postal system's businesses and in 2002 a package of four bills was passed which established Japan Post as a public corporation. In the following year, he was reelected with a promise to privatize the postal system. In 2004, Koizumi's government announced an ambitious ten-year plan for splitting Japan Post into several privatized entities by 2017.[16] In 2005, the resulting package of six privatization bills was defeated in the upper house of the Japanese Diet, and Koizumi called a snap election focused on postal privatization.[14][16] He won the election in a landslide, receiving a public mandate for his privatization plans and defeating members of his own party who were opposed.[18] The privatization package passed a few weeks later.[14]

The Postal Privatization Law passed in 2005 laid out a framework for a preparation phase, a ten-year transition phase that was revised to start on October 1, 2007, and a post-privatization phase to organize the companies into their final forms.[15] A Cabinet-level Postal Privatization Headquarters would be established to develop and implementation plan to manage privatization and divide the resources of Japan Post between the successor companies.[16]

Japan Post Holdings was to start as a state-owned holding company for Japan Post Bank, Japan Post Insurance, Japan Post Network, and Japan Post Service and gradually sell off its shares through 2017.[15] The original plan was for the government to retain about a one-third ownership share of Japan Post Holdings, and for Japan Post Holdings to sell all its shares in its banking and insurance subsidiaries. Proceeds from the sale were to be used to reduce government debt.[16]

The plan for privatization did not proceed smoothly, and after having been subject to a variety of external factors it continues today. In 2009, the Democratic Party of Japan took power and halted the IPO for Japan Post companies.[19] In 2012, the administration went further in blunting some aspects of privatization, allowing the government to maintain indefinite control over Japan Post Holdings and removing targets for shares sold of the banking and insurance services.[15]

In late 2012, incoming Prime Minister Shinzo Abe reemphasized progress towards privatization as part of his Abenomics plan for economic reform and growth. It was also hoped that the sale of shares could raise funds for rebuilding after the Great East Japan Earthquake.[15][20] One result was the expediting of the IPO process for Japan Post companies.[15] In 2015, a triple IPO was conducted where Japan Post Holdings, Japan Post Bank and Japan Post Insurance each had about 10% of their shares offered for sale in the Tokyo Stock Exchange for the first time.[21]

Privatization is ongoing slowly, having already fallen short of the original plan. At the end of 2019, the government had a 57% ownership stake in Japan Post Holdings,[22] which still owns 90% of Japan Post Bank and Japan Post Insurance.[23][24]