JGBs for Individuals Struggling amid COVID-19 Crisis

Economy

Tokyo, May 10 (Jiji Press)--Issuances of Japanese government bonds tailored for individual investors, which were introduced in March 2003, are now floundering due to dwindling opportunities for in-person sales amid the novel coronavirus crisis.

Annual issuances of the JGBs targeting individuals have fallen to around 3 trillion yen in recent years, from over 7 trillion yen at their peak. To reverse the situation, the Ministry of Finance is continuing to explore ways to spread information about the bonds, including via social media.

The issuance of JGBs designed for individual investors started with the aim of expanding sales to those other than institutional investors and ensuring stable JGB marketing. Currently, 10-year floating-rate bonds, and three- and five-year fixed-rate notes are offered to individuals.

After peaking in fiscal 2005 at 7.2 trillion yen, annual issuances of JGBs for individual investors plunged due to falls in domestic interest rates. The issue amount recovered to 5.2 trillion yen in fiscal 2019 after the MOF reviewed its methods for setting interest rates and the pace of issuances.

The ministry also beefed up its social media operations to tackle low recognition of the bonds among young people. The ministry launched a Twitter account in fiscal 2011 to release information about the bonds and then set up a Facebook page. In fiscal 2020, it began to use the Line messaging app and Instagram.

[Copyright The Jiji Press, Ltd.]

Jiji Press