On 23 June 2009, Mizuho Financial Group (MFG) announced that it will issue ¥139.5 bn in Japanese yen denominated preferred securities in an effort to shore up its capital base, after weak financial market conditions eroded the value of its investments in other companies. Considering the worsening of the macroeconomic scenario in Japan and MFG's exposure to the US mortgage market, rising credit costs and further writedowns anticipated over our investment horizon…

The Mizuho Financial Group (MFG) common stock has appreciated significantly since we rated it a HOLD in our update supplement dated 24 April, including a sharp gain on 07 May 2009. This reflects optimistic investor reaction to the outcome of stress tests of leading US financial institutions. However, considering MFG’s exposure to the US mortgage market, rising credit costs and further writedowns anticipated over our investment horizon, we maintain our 6-12 month HOLD rating....

The International Monetary Fund (IMF) projects that Japanese GDP will contract by 2.6% in 2009 and grow by 0.6% in 2010 (source: World Economic Outlook Update, January 2009). In 3Q 08, the economy contracted at annualized rate of 12.7% compared to the prior quarter. The worldwide economic downturn has already had a significant impact on Japan’s export sector; according to the Financial Times, exports fell by nearly 50% in the year…