{"url_path":"/sec/lgps/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-07-13","source_url":"https://www.sec.gov/Archives/edgar/data/2040290/0001493152-26-032936-index.html","accession_number":"0001493152-26-032936","cik":"0002040290","ticker":"LGPS","issuer_name":"LOGPROSTYLE INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/2040290/0001493152-26-032936-index.html","primary_entity_key":"0002040290","primary_entity_name":"LOGPROSTYLE INC."},"word_count":351,"has_tables":true,"body_markdown":"**ITEM\n11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\n \n\n**Quantitative\nand Qualitative Disclosure About Market Risk**\n\n \n\n**Foreign\nCurrency Risk**\n\n \n\nWe\ntransact our operating activities mainly in Japan, and the majority of our cash generated from revenue is denominated in Japanese yen.\nOur expenses are generally denominated in Japanese yen. Foreign exchange risk arises from future commercial transactions and recognized\nassets and liabilities. We acknowledge the recent volatility of the U.S. dollar but believe we are relatively insulated from foreign\nexchange risk, as most of our economical transactions are conducted within Japan and using the Japanese yen.\n\n \n\n**Inflation\nRisk**\n\n \n\nInflationary\nfactors, such as increases in our operating expenses, may adversely affect our results of operations. Although we do not believe that\ninflation has had a material impact on our financial position or results of operations to date, an increase in the rate of inflation\nin the future may have an adverse effect on our levels of operating expenses as a percentage of revenue if we are unable to increase\nour prices to keep pace with these increased expenses.\n\n \n\n**Interest\nRate Risk**\n\n \n\nWe are exposed to interest-rate risk primarily through\nborrowings used to finance property acquisitions, development projects, hotel investments and working capital. As of March 31, 2026, our\ntotal outstanding borrowings and bonds (based on contractual principal) were approximately JPY17,198 million, of which approximately JPY11,718\nmillion, or approximately 68%, bore variable interest rates. Our variable-rate borrowings bear interest primarily by reference to Japanese\nshort-term or long-term prime rates. Interest expense increased from JPY209,971 thousand in the fiscal year ended March 31, 2025 to JPY328,962\nthousand in the fiscal year ended March 31, 2026, primarily reflecting higher borrowing levels. Based on our variable-rate borrowings\noutstanding as of March 31, 2026, a hypothetical increase of 100 basis points in applicable interest rates would increase our annual interest\ncost by approximately JPY117 million. We do not currently use derivative instruments to hedge interest-rate risk. We monitor interest-rate\nexposure as part of our debt-maturity and refinancing management, particularly in light of the Bank of Japan’s monetary policy normalization.\nSee Note 10 to our consolidated financial statements."}