13.3% decrease in portfolio value, page-4

I believe the hedging was out of the money by about Y3b on May 27th - the exchange rate was 73.89 at the close. Today the x rate is about 75.60, which is more in the money, so hedging cost will be reduced. However this does not need to be cleared in November this year, as so the next test will be in six or twelve months. BJT should be making about Y4b per annum, but is exposed to the M2M consequences of this hedge if the AUD falls.

There is a Y18.6b loan maturing in March 2010, that was at 39% LVR at 31/12/08. On the maturity date the underlying securities can have fallen by 33% from Dec 31 08 to still have the LVR at 60%, and most likely get this one refinanced. (Wish I knew exactly which securities were involved).

There is plenty of time for the property market in Japan to stabilise before the major refinances due in 2012. Good cashflow on the way through as well.

The Japanese government is now committed to supporting the commercial property trusts by providing liquidity. So I feel very confident about BJT's future. I am confident this half will have been the absolute bottom of the Jap property market cycle!