A Century-Old Japanese Bank Preemptively Sold US Treasury Bonds to Avoid the Market Earthquake Triggered by Trump.

Japan's century-old Norinchukin Bank sold a large amount of US and European government bonds to cover previous losses, which also helped it avoid the market turmoil triggered by Trump's policies this month.

Taro Kitabayashi, the new CEO of Norinchukin Bank, stated in a media interview that the bank had completed the sale of US Treasury bonds by the end of March, thus successfully avoiding the severe market fluctuations caused by Trump's tariff policies.

It is understood that Norinchukin Bank, established in 1923, is one of Japan's largest institutional investors, primarily serving Japan's agricultural, fishery, and forestry cooperatives, managing $300 billion in assets.

As of the end of December last year, the bank had cumulatively sold $1.28 trillion worth of US and European government bonds. Kitabayashi added that there are currently no plans for large-scale sovereign bond trading.

Earlier rumors suggested that a Japanese hedge fund recently went bust due to a surge in US bond yields. If Kitabayashi's statement is true, then this anonymous hedge fund is not Norinchukin Bank.

Kitabayashi stated that Norinchukin Bank is expected to achieve a profit target of 30 billion to 70 billion yen (approximately $210 million to $490 million) for the fiscal year. He also added that the bank will cautiously proceed with new investments until a clearer market environment emerges.

"The only certainty is that uncertainty is rising, and we are not in a situation where we must rush to invest for profits," said Kitabayashi, who succeeded Kazuto Oku as CEO in early April, after Oku resigned due to a massive loss of $190 billion last year.

Kitabayashi's primary task upon taking office is to reduce the bank's over-reliance on sovereign bonds, including US Treasuries. He pointed out that a more diversified investment portfolio will help mitigate the risks brought by the current market volatility.

"Facing the severe instability brought by the Trump administration, diversifying the investment portfolio is particularly important. No matter what happens, some assets may be negatively affected, but others may bring positive returns."

Previously, Norinchukin Bank financed the purchase of US long-term bonds, betting on an early and significant interest rate cut by the US Fed, but this expectation was not met. The US Fed's cautious pace of interest rate cuts led to a sharp decline in US bond prices, forcing Norinchukin Bank to sell US bonds to stop continuous losses.