Moody’s changes Nippon Yusen’s A3 rating outlook to negative

Tokyo, June 15, 2009 -- Moody's Investors Service has today changed to
negative from stable the rating outlook for the long-term issuer ratings
and senior unsecured ratings of Nippon Yusen Kabushiki Kaisha (NYK, A3)
and its supported subsidiaries, NYK International plc (A3) and NYK
Finance (Cayman) Ltd. (Baa1).

The outlook change reflects Moody's concern that NYK's financial leverage
is likely to remain high, given the current stagnant ocean shipping
market and slack air cargo business.

After a brisk period for ocean shipping industry in recent years, mainly
due to the vital imports and exports by China and other emerging
countries, NYK projects that its operating profit for FYE3/2010 will be
JPY53 billion, a significant decline from JPY145 billion in the previous
year.

Moody's understands that this low level of operating profit is due to
NYK's stagnant ocean shipping businesses and the continuous operating
loss from the company's air cargo business, which was consolidated in
October 2005.

Since the consolidation, Nippon Cargo Airlines Co., Ltd. (NCA), NYK's
subsidiary for air cargo transportation, has not contributed to the
group's profitability. In addition, Moody's notes that the capital
expenditure for restructuring NCA's fleet to become cost efficient has
been a financial burden for NYK.

Moody's recognizes that engaging in and growing an air cargo
transportation business is one of the essential components for NYK's
overall business strategy of becoming an integrated global logistic
business, which includes ocean shipping, land transportation and air
cargo. The rating agency believes that NYK's business strategy will help
further strengthen NYK's stable relationships with its core customers in
the long term.

However, Moody's is concerned that NYK's intensive capital expenditures
on its shipping and air cargo fleets have been pressuring the company's
financial flexibility, given the stagnant market conditions in both
sectors. Its total debt to total capitalization ratio at end-March 2009
was around 74% (based on preliminary adjustments), a significant increase
from 69.5% a year earlier.

Moody's will closely monitor NYK's policy to restore its financial
profile. NYK's rating will face downward pressure if the company cannot
take significant enough measures to recover its capital structure within
the next six months or so.

The last rating action with respect to NYK was implemented on May 11,
2006, when Moody's affirmed the company's A3 ratings.

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