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result, the yen strengthened to the point that the government was forced to step in. In August 2011, the government and the Bank of Japan unilaterally intervened by selling the yen and purchasing dollars. In late October, when the yen rose to a postwar high against the US dollar, Japan again intervened to sell yen and pur- chase dollars, though this was not enough to turn the tide. The financial crisis in Europe began to trigger euro-selling pressure, and yen purchases. This pressure accelerated in November 2011, and by the end of the calendar year the yen had strengthened to ¥100= € 1.00. In February 2012, the Bank of Japan introduced monetary easing policies, adopting a “price stability target for the medium to long term.” The yen began to retreat from its historically high levels and stock prices responded as well. The Japanese government bond market shrugged off the impact of a credit downgrade by Japanese rating agencies in late December 2011, from the highest rating level, in part because the ratings agencies’ intentions were announced well before the actual downgrades, and the future outlook projections for the ratings were listed as “stable.” The Nikkei 225 ended the fiscal year at 10,083.56 (an increase of 328.46 year on year) and ten-year JGB yields stood at 0.985% (a decline of 27 basis points year on year), while the yen closed the period at ¥82.17=US$1.00 (with the yen up ¥0.67 year on year). 

Rebuilding efforts in some of the regions affected by the East Japan Earthquake have been delayed. This is partly a reflection of the fact that the sheer scale of the damage is beyond any past precedents. There is also the issue of radiation exposure, as damage to the Fukushima nuclear plant left many areas radioactive. With political will sapped by infighting, there were many delays to the development of reconstruction plans. It took more than three months following the quake—until June 2011—before a formal reconstruction plan was passed by the government, and spending budgets were only passed in July with the government’s second supplementary budget. The large-scale spending projects initially planned for inclusion in the third supplementary budget in August fell victim to internal dissent and a cabinet reshuffle, and thus did not get passed until November 2011. Reconstruction-related demand finally began to pick up in early 2012, but the scale and impact was limited. It is likely to become a significant factor, at last, during FY2012. 

## Analysis of Consolidated Income Statements 

## <Total Operating Revenues and Net Operating Revenues> 

Consolidated operating revenues for the period rose 4.8% year on year, to ¥422.4 billion, while net operating revenues increased 5.5%, to ¥336.0 billion. Income from commissions rose 1.0%, to ¥220.8 billion. However, despite a slight pickup at the end of the year, brokerage commissions fell 19.5% year on year, to ¥40.8 billion, reflecting a drop in equity brokerage commissions due to weak stock market conditions over the course of the fiscal year. 

Furthermore, since there were relatively few major stock under- writing contracts during the period, underwriting commissions fell 25.8% year on year, to ¥19.5 billion. On the other hand distribution commissions to support sales of the Retail Division’s investment trusts soared by 55.6%, to ¥49.1 billion. 

## Breakdown of Net Operating Revenues 

<img src='content_image/158016.jpg'>

## Breakdown of Consolidated Income 

(¥ billion) 

<img src='content_image/158017.jpg'>

Note: Quarterly figures have not been audited by an independent auditor. 

