Japan’s corporate bond market is booming, as an economic rebound and plans to get ahead of higher interest rates encourage a flurry of issuance.
Japanese companies have sold ¥14.7 trillion ($96.8 billion) of local-currency bonds in the current fiscal year, a record for the period, according to data compiled by Bloomberg. A key motivation: locking in funding ahead of an anticipated series of rate hikes, which will push up future borrowing costs.
The issuance surge underscores the sweeping changes taking place in Japan. The central bank has ended the world’s boldest experiment with ultraloose monetary policy, the economy is finally turning a corner and a series of corporate governance reforms have put pressure on local companies to hunt for growth.