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For its biggest banks, however, there's a hitch: a generation of professional front-line staff have little experience with rising interest rates. The 38 members, which include credit dealers and data scientists, work to improve coordination between retail and wholesale divisions, as higher rates are expected to fuel trading activities. Still, if higher rates are new to most bankers, so they are for their clients, who have for years enjoyed rock bottom rates in Japan. "Almost no front-line bankers have experienced short-term rates above 0.5% as Japan last saw such rates in the 1990s," he said. "I think there are a lot of scepticism among front-line bankers over whether they can really increase their lending rates."

Persons: Masahiro Minami, they've, Izuru Kato, Kato, Satoru Yamamoto, Atsushi Kikuchi, Tokyo Tanshi's Kato, Makiko Yamazaki, Ritsuko Shimizu, David Dolan Organizations: MUFG Bank, TOKYO, Resona Holdings, Reuters, Bank, Mitsubishi, Daiwa Securities, Mizuho Financial, Mizuho, Thomson Locations: Japan, Tokyo

[1/2] A man walks past a signboard of Mitsubishi UFJ Financial Group and MUFG Bank at its headquarters in Tokyo, Japan April 3, 2018. Globally bonds have been heavily sold for weeks - prompting the Bank of Japan to step in to steady the JGB market - as investors reckon on interest rates around the world staying elevated. The lingering concerns, coupled with the prospect of further central bank policy tweaks, are likely to keep investors on guard against buying JGBs," he said. Even if the BOJ raises short-term rates, it will probably have to maintain the YCC framework to avoid any abrupt rise in long-term interest rates, Seki said. The BOJ will have no choice but to engage with long-term rates "because the complete removal of a target band could cause volatility in yield curve and sharp spikes in long-term interest rates," he said.

Persons: Toru Hanai, Hiroyuki Seki, Seki, Makiko Yamazaki, Ritsuko Shimizu, Leika Kihara, Muralikumar Organizations: Mitsubishi UFJ Financial, MUFG Bank, REUTERS, Rights, Bank of, Bank of Japan, Reuters, Thomson Locations: Tokyo, Japan, U.S

Stock incentives are seen positively by the market "as higher stock prices directly boost such incentives," she said. Sony, which introduced stock incentives years ago for some management levels, recently changed its framework to make the incentives more attractive, a spokesperson said. "The stock incentives are aimed at beefing up engagement with employees and promoting their interest in raising corporate value." Today, employee stock incentives are also a way for companies to replace cross-shareholdings, a common practice where companies take stakes in partners to cement relationships and avoid activist investors. Despite its increasing popularity, just a quarter of top 100 Japanese companies have employee stock incentives compared to more than 80% in the United States or Germany, data by consulting firm Human Resources Governance Leaders shows.

Persons: Kim Kyung, Motomi Hashimoto, Hitoshi Tanimura, Shintaro Takano, Shinzo Abe, Shinji Ishikawa, Makiko Yamazaki, Ritsuko Shimizu, Miral Organizations: Nikkei, REUTERS, Rights, ANA Holdings, ANA, Sony Group, Tokyo Stock Exchange, Nomura Securities, Reuters, Sony, Human Resources, Leaders, Mitsubishi UFJ Trust, Thomson Locations: Tokyo, Japan, Omron, United States, Germany

TOKYO, June 27 (Reuters) - State-backed Japan Investment Corp (JIC) sees potential for more mergers and acquisitions in high-end corners of the chipmaking industry following its planned $6.4 billion buyout of materials maker JSR (4185.T), the head of its private equity arm said. "We see potential in some speciality materials markets where JSR can win dominant positions by combining with other materials makers," Ikeuchi said in an interview. "We believe that we can boost Japanese chip materials makers' global competitiveness by spurring industry consolidation," he added. In the chemicals industry, for example, Japan has "too many players making similar products that were once competitive but are now commoditised," Ikeuchi said. JIC, overseen by the powerful trade ministry, was set up in 2018 to invest in Japanese companies to boost the nation's competitiveness.

Persons: Shogo, Ikeuchi, JIC, Makiko Yamazaki, Ritsuko Shimizu, Jamie Freed Organizations: Japan Investment Corp, JIC Capital, Japan, Innovation Network Corp of Japan, Thomson Locations: TOKYO, chipmaking, Japan

TOKYO, March 31 (Reuters) - Japanese regional lenders will be well able to weather even "large" losses on their foreign bond portfolios thanks to strong capital buffers, a senior banking regulator official said, rebuffing concerns fuelled by U.S. banking woes. "Overseas media seem to be focusing on Japanese regional banks in association with the SVB collapse, but I'd like to emphasise that they are completely different," he told Reuters in an interview. Analysts at SMBC Nikko Securities calculated unrealized foreign bond losses at over 70 listed Japanese regional banks totalling 1.4 trillion yen ($10.6 billion) at the end of last year, the worst in decades for global bond markets. "It is true that unrealized losses on foreign bond holdings at some regional banks are large, but the banks have enough capital buffers even when such losses are taken into account," Yashiki said. He also said he saw no immediate need to review Japan's regulatory framework as Japanese banks have grown resilient with significantly improved asset quality.

Other investors who have held Toshiba longer may not be so lucky: the offer price represents a 15% discount from a December 2014 high. Some were introduced to JIP by Toshiba's management, some of the people said, declining to be identified because the information is not public. Toshiba's management, including CEO Taro Shimada, will stay on, while the government keeps Toshiba's sensitive defence and nuclear technologies in Japanese hands. Toshiba felt stable shareholders were desirable to end the tumult, unlike current shareholders "with many differing views", it said. JIP does not see the need for big strategy adjustments, Toshiba said.

But its tussle with the $620 million Toyo, Japan's third-largest marine construction firm in which it holds 27%, has been anything but whimsical. When asked for comment, Toyo Construction said it intended to set up a committee to consider the takeover proposal. It said it repeatedly requested more information to help it evaluate the offer but the Yamauchi office had not responded. The Yamauchi family office announced its all-cash offer to take Toyo private in May last year, a 30% premium to an earlier bid by Toyo's then largest shareholder. The board supported the lower offer, which later lapsed and the Yamauchi family office says it spent many months trying to engage with the board.

"The company has received a proposal from the JIP consortium," Toshiba said in a statement. Two of the sources said major Japanese banks, including Sumitomo Mitsui Financial Group (8316.T), had issued letters of commitment to provide 1.4 trillion yen ($10.6 billion) in loans to the group. The final buyout proposal would also include an equity portion of about 1 trillion yen, they said. The Nikkei business daily reported the total value of the buyout proposal was around 2 trillion yen. JIP was then asked by Toshiba to provide commitment letters from banks by Nov. 7, something it was unable to do.

Major Japanese banks, including Sumitomo Mitsui Financial Group (8316.T), had issued letters of commitment to provide the loans to the JIP-led group, said two of the sources, who declined to be identified because the information has not been made public. The 1.4 trillion yen of loans included a commitment line of 200 billion yen for working capital, the sources said. The final buyout proposal would also include an equity portion of about 1 trillion yen, they said. The Nikkei business daily reported a final buyout proposal worth around 2 trillion yen. The banks asked Toshiba to promise the sale of underperforming businesses if earnings deteriorated after a buyout was concluded, sources, including those who spoke on Thursday, have previously said.

Major Japanese banks, including Sumitomo Mitsui Financial Group (8316.T), have issued letters of commitment to provide the loans to the JIP-led group, said the sources, who declined to be identified because the information has not been made public. The Nikkei business daily reported a final buyout proposal worth around 2 trillion yen had been submitted. Sources said the 1.4 trillion yen of loans included a commitment line of 200 billion yen for working capital. Toshiba named the JIP-led group as its preferred bidder in October. The private equity firm was then asked by Toshiba to provide commitment letters from banks by Nov. 7, something it was unable to secure by that date.

The 1.4 trillion yen includes 200 billion yen in working capital, they said. The main banking arms of Mizuho Financial Group (8411.T), Sumitomo Mitsui Financial Group (8316.T) and Sumitomo Mitsui Trust Holdings Inc (8309.T) are together expected to lend more than 1 trillion yen, three sources said. The core bank unit of Japan's biggest financial group, Mitsubishi UFJ Financial Group (8306.T) and Aozora Bank Ltd (8304.T) are also participating, they added. Spokespeople for all five banks declined to comment. Toshiba named a JIP-led group as its preferred bidder in October for the buyout process.

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