JAPAN’S Finance Ministry is considering expanding its lineup of government bonds available to individual investors, with experts pushing for new products such as inflation-linked bonds amid rising prices, its officials say.
Bond purchases by individual investors have been soaring as the Bank of Japan moves to raise interest rates. The ministry is also eager to diversify buyers of its debt given that the BOJ is reducing bond purchases as part of its monetary normalization following a decade of unorthodox easing.
During a meeting among experts on managing government bonds, some attendees called for offering super long-term bonds with 20- or 30-year maturities to individual investors.
Currently, there are three types of government bonds for individual investors in Japan.
One is the 10-year floating rate bond, whose applicable interest rate changes every six months in line with market interest rates. The two others are fiveyear fixed-rate bonds and three-year fixedrate bonds, whose interest rates remain unchanged until maturity. The interest for these bonds is paid every six months, and the principal returned at maturity.
A ministry survey recently showed that the holdings of fixed five-year bonds have increased across all age groups. But the ministry wants to reach out more to relatively younger, working-age people under 30 as well as those in their 40s, according to a ministry official. — Kyodo
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