Key facts
- Japanese companies have sharply increased their issuance of convertible bonds, reaching a 22-year high.
- The total issuance from January to June reached $6.8 billion.
- Foreign investors are increasing their participation in Japanese convertible bonds to curb equity risks.
- Rising fiscal spending and expectations of central bank rate hikes are contributing to this trend.
- The benchmark 10-year bond yield reached 2.38% in January, its highest level since 1999.
Companies in Japan have significantly increased their issuance of convertible bonds, reaching a level not seen in over two decades. The total issuance from January to June reached $6.8 billion, driven by foreign investors seeking to mitigate risks associated with stock trading. This trend is further fueled by rising fiscal spending and expectations of central bank rate hikes, which have increased the cost of traditional debt instruments. The benchmark 10-year bond yield hit 2.38% in January, its highest point since 1999. Investment bankers anticipate a strong year for convertibles in 2026, with companies like Advantest utilizing this financing method, as seen when the chip testing equipment maker raised 100 billion yen in April.