Honda shares will be cut by 3.3 billion dollars, and multiple Japanese financial institutions will resolve their holdings

Mitsubishi UFJ and Mizuho, which are Japan's first and third largest financial groups, are also scheduled to participate in this sale, indicating that the pace of dissolution of holdings is accelerating as part of Japan's corporate governance reforms.

Shareholding, where companies hold shares with each other, has long been viewed as a way to strengthen business relationships in Japan. However, governance experts and foreign investors have pointed out that shareholding may lead to lax governance by protecting the management team from shareholders.

The current stock sale is a joint offering by 10 financial institutions, and the price is yet to be determined for 300 million shares, including overallotments. The closing price of Honda stock on Thursday was 1,791 yen, and the sale amount will be approximately 535 billion yen.

Mitsui Sumitomo Insurance, an insurance subsidiary of MS&AD, and four non-life insurance companies, including Aioi Nissay Dowa Insurance, announced that they would reduce their stock holdings to zero within a few years as a response to last year's price manipulation issues.

Honda has already announced plans to carry out stock buybacks worth up to 300 billion yen during this fiscal year. On Sunday, the company announced that it would not make any further share buybacks.