JAPAN POST HOLDINGS Co., Ltd.

The Fair Trade Commission has been proceeding with steps to issue a recommendation to Japan Post for violating the Freelance Law, it was learned on the 27th. For individual business owners who were commissioned for work such as training instructors, the commission is expected to find that Japan Post failed to specify conditions such as payment deadlines in advance and delayed payments. According to sources, since November 2024, Japan Post commissioned work to over a hundred individual business owners without specifying transaction conditions in writing beforehand. Under the Freelance Law, if payment deadlines are not specified, payment must be made on the date of work completion, but Japan Post paid after the completion date except for some cases. According to Japan Post, an internal survey conducted from September to October last year found at least 380 transactions at the head office and branch offices that could violate the law, related to commissioned work such as employee training instructors, experts, and flyer printing. The company acknowledged that its internal rules were inadequate and that awareness was insufficient, and revised the rules in February this year. The company admitted to being under investigation and commented, "There were cases where we did not specify transaction conditions in advance. We will thoroughly communicate the revised rules."

A series of bribery cases involving employees at Japan Post Group has prompted experts to warn of the need for a fundamental rebuilding of governance. In May, the Tokyo Metropolitan Police arrested a former employee of Japan Post's Tokyo branch for allegedly accepting bribes in return for favors related to a bidding process for mail collection services. This month, a former Japan Post employee was referred to prosecutors for allegedly influencing a bidding process for post office reconstruction work to secure contracts. Shigeru Tachihara, professor emeritus at Tokai University, noted that with the two financial arms, Kampo Life and Yucho Bank, propping up earnings, Japan Post faces limited growth prospects, leading to a decline in compliance awareness across the group. He pointed out that nearly 20 years after privatization, employees' sensitivity to bribery may have faded, and stressed that a fundamental organizational reform to rebuild governance is necessary for the public service.

Mobile phone service disruptions and temporary closures of convenience stores and gas stations continued on the 29th following the earthquake that registered a maximum seismic intensity of 7 in Kumamoto Prefecture. NTT Docomo, KDDI, SoftBank, and Rakuten Mobile reported that calls and data services remain unavailable in parts of the prefecture due to power outages at base stations and transmission line failures, with no timeline for restoration. Major convenience store operators Seven-Eleven Japan, Lawson, and FamilyMart have temporarily closed a total of over 100 stores in the prefecture due to power outages and worsening road conditions, and are rushing to resume operations while providing relief supplies to disaster victims. According to the Ministry of Economy, Trade and Industry, 18 gas stations in the affected areas had suspended operations as of 1 p.m. on the 29th, with another 101 stations under status confirmation, impacted by the suspension of shipments from two oil terminals in Yatsushiro City. Japan Post has halted all counter services and Yu-Pack parcel handling in the prefecture, and Nippon Express has also suspended cargo acceptance and collection and delivery across wide areas of the prefecture.

Japan Post announced on the 28th that its postal business posted an operating loss of 32.2 billion yen for fiscal 2025, falling into the red for the fourth straight year. The company had initially forecast a profit of 6.7 billion yen, but the decline in mail volume was larger than expected. While the loss narrowed from the 63 billion yen deficit in the previous fiscal year, it remained in negative territory. Domestic mail revenue rose by 53.3 billion yen year on year, as the impact of the October 2024 postage rate revision was felt throughout the year. However, operating expenses also increased by 18.6 billion yen, partly due to higher personnel costs from base pay raises. The improper driver roll-call issue in collection and delivery operations also had a certain negative impact on earnings. For fiscal 2026, Japan Post indicated that returning to profitability would be difficult, as revenue growth is not keeping pace with rising costs.

Japan Post has released the results of an internal investigation into a bribery case in which a former employee leaked the planned price in a tender for a contract to collect mail from postboxes and received favors in return. It was found that the former employee's predecessor and the predecessor before that also engaged in similar misconduct in a tender in February 2021, and that the methods were handed down among those in charge. The predecessor testified to having received favors worth 400,000 yen from a contractor, while the predecessor before that said they received nothing. Japan Post has already dismissed these three individuals as a disciplinary measure and is also considering its response to the 2021 misconduct.