Impetus from overseas
Foreign investors are now able to invest in Japanese inflation-linked bonds, removing one of the major impediments to market growth. But a shortage of supply means there is unlikely to be a big bang in trading volumes. By Nick Sawyer
June could be a key month for Japan’s inflation-linked bond market. The Ministry of Finance (MoF) will hold the first of four inflation-linked Japanese government bond (JGBi) auctions scheduled for this fiscal year, raising the amount outstanding from ¥900 billion ($8.4 billion) to ¥1.4 trillion. But it’s not the size of the auction that will have the biggest impact. For the first time, foreign investors will be able to buy JGBis, removing one of the major obstacles to future market growth.
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