Credit Market in Japan Bucks Global Trend as Firms Line Up Deals

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Japan is one of the few major markets where corporate bond sales are barreling ahead as issuers grab what may be their last opportunity to lock in low borrowing costs.

Toyota Motor Corp., the world’s largest carmaker, and at least 20 other firms are looking to raise funds in October. That would add to ¥12.7 trillion of deals so far this year, the most for that period on record. In contrast, US investment-grade corporate bond issuance has fallen to the lowest in four years.

A government push for savers to shift more into investments is resulting in a more active credit market and a broader range of products. Among public offerings, there was a debut sale of bonds by a company without credit ratings, and SoftBank Corp. is planning to issue bond-type stock in the first of its kind in the country.

At the same time, investors in Japanese corporate bonds have enjoyed a return of 0.5% so far this year, after the first annual loss in 11 years in 2022. An end to the BOJ’s negative-rate policy and yield-curve control program may come in January, with a “risk of early revision” in December, Morgan Stanley MUFG Securities Co. said last week.

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