Investment EnvironmentAt the beginning of fiscal 2013, the yield on 10-year Japanese Government Bonds (JGBs)—the prime indicator of domestic long-term interest rates—stood at 0.56%. After the Bank of Japan (BOJ) implemented a new phase of monetary easing both in terms of quantity and quality—namely the QQE—at the start of the fiscal year, the yield fell, reaching 0.315% on April 5, 2013, the lowest in the bond’s history. However, investors grew concerned that the central bank would have difficulty preventing long-term interest rates from rising, and the yield rose sharply to 1.00% on May 23.After that, the bond yield declined gradually to touch 0.64% at the end of the fiscal year in response to the BOJ’s proactive JGB purchases.In the domestic stock market, the Nikkei 225 Average started fiscal 2013 at ¥12,371, and then rose in response to the BOJ’s QQE and a weaker yen. Not long after, the market dipped momentarily when investors grew alarmed by the abrupt rally and sold off some of their stock holdings.In December, in response to strong corporate earnings in Japan, the market pushed the index above ¥16,000 for the first time in about six years.Then, in the months that followed, funds began flowing away from emerging countries as the U.S. Federal Reserve began tapering out its monetary policy of quantitative easing. The resulting fall in the currencies of emerging countries upset global markets, and the Nikkei 225 Average declined to ¥14,827 by the close of fiscal 2013.On the foreign exchange markets, the yen stood at ¥94.21/$1 at the start of fiscal 2013. The yen strengthened for a short time before investors were prompted to buy a large amount of dollars when the U.S. Federal Reserve began tapering out its quantitative easing. Consequently, the yen ended the fiscal year at ¥102.92 against the dollar. March 31, 2013March 31, 2014Long-term interest rates (10-year JGB yield)0.56%0.64%Stock market (Nikkei 225 Average)¥12,397.91¥14,827.83Foreign exchange market (¥/$ rate)¥94.05¥102.92JGB: Japanese Government BondInvestment PolicyZenkyoren is engaged in both the life and non-life insurance businesses. Moreover, most of our liabilities are liability reserves at fixed long-term interest rates because the main products we market are long-term insurance policies with predetermined fixed rates of return.To secure funds for paying claims and other insurance refunds in the future, Zenkyoren invests mainly in fixed-income assets (government and corporate bonds, and loans) denominated in yen. In order to enhance profitability, it also invests in some equities and foreign bonds.Working Assets (¥ Billion)Breakdown of Working AssetsASSET MANAGEMENT Highlights of Investment in Fiscal 201360,00045,00015,00030,0000Fiscal Year200920102011201250,4422013n Securities93.9% n Public and corporate bonds87.0% n Foreign securities3.5% n Equities2.1% n Other securities1.3%n Loans receivable3.0%n Cash, bank deposits, and call loans0.8%n Real estate investments0.7%n Miscellaneous items1.6%ANNUAL REPORT 201410