Ryusho Soeda, 66, has taken on a job for which his career as a Buddhist priest never prepared him: forensic accounting. Soeda's temple is the 1,200-year-old Koyasan, a World Heritage site deep in the mountains of western Japan and long prized as a haven for quiet contemplation. But in recent months monks here have been debating a very worldly question: How did a complex bet on the yen go so horribly wrong?
Soeda, who was picked to head Koyasan in June after his predecessor was forced out, has promised a full accounting of the temple's losses, which at one point last year threatened to wipe out half of its endowment.
"My duty is to find out exactly what has happened and to publish it. Just like Greece published its window-dressing only after they had a new government, the truth will not come to the light unless you change the power," Soeda told Reuters.
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The financial crisis at Koyasan is an example of an overhang of losses that cash-rich Japanese religious groups, schools, small firms and wealthy individuals are facing - and in some cases fighting in court - because of financial derivatives tied to the yen.
Fujita Health University, which runs one of Japan's biggest hospitals, lost $240 million on currency derivatives. Nanzan University in Nagoya said this year it had lost over $230 million. Both schools took their losses from derivatives that were sold to them in the unsupervised, over-the-counter market. In many other cases, the losses have been driven by a product called a "power-reverse dual currency bond," a derivative marketed heavily to non-profit investors in Japan.
The losses highlight a problem Prime Minister Shinzo Abe has vowed to address: Japan's long-running economic slump has left its massive savings stranded in dead-end investments and left investors desperate for yield.
Abe has pledged to revive the world's third-largest economy and foster growth that can outstrip renewed inflation of 2 percent. But doing so will also mean driving a change in mindset by Japan's investors and driving home the message that risk follows return.
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"Power reverse dual currency bonds" - known by the acronym PRDC - offered a higher return at a time when the yield on 10-year Japanese government bonds was stranded at less than 1 percent. Their popularity peaked in 2006 and 2007, just before the onset of the global financial crisis.