Japan retail investors drawn to JGBs with returns at 17-year high
Households play growing role in absorbing supply as institutions hold off on buying
The coupon on 10-year floating-rate Japanese government bonds for individuals topped 1% in July, its first time in that territory since 2008. (Photo by Akira Kodaka)
YUKA KAWAI and TAKAHISA TAMURA
TOKYO -- Retail investors are emerging as significant players in the market for Japanese government bonds, drawn by coupon rates that have reached their highest point in nearly two decades, even as demand from institutional investors flags.
Individuals can purchase three types of JGBs: a 10-year floating-rate bond whose coupon changes every six months based on market rates, and three- and five-year fixed-rate bonds whose coupons are locked in at issuance. The coupon on the 10-year bonds, once as low as 0.05%, has steadily risen since 2022, topping 1% for the first time since 2008 this July.
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