Returning to the Japanese Yen market, our website plans a multi-part bond issuance
Our Website Returns to the Japanese Yen Market After Nine Years
In a strategic move, our website has issued Euro-Yen-denominated bonds worth 64.3 billion Japanese Yen, marking its re-entry into the Japanese Yen market after a nine-year absence since 2015. This decision reflects the company's commitment to diversify and strengthen its funding plan while enhancing its presence in the Japanese capital markets.
Rationale for the First JPY Bond Issuance in Nine Years
Issuing a JPY bond after such a long interval signifies the company's need to access funding in a currency aligned with its operational or financial needs in Japan. This move can hedge against currency risks or align debt servicing costs with revenues if the company has significant operations in Japan.
The current macroeconomic climate in Japan, with rising inflation (core inflation at 2.9% in 2025) and a weakening yen (38-year low against the USD), presents both challenges and opportunities. Issuing JPY bonds can leverage possible local investor appetite for fixed income amid these dynamics.
Japan's bond market is at a crossroads, with the Bank of Japan under pressure to adjust its ultra-loose monetary policy and debt management strategies. This situation suggests potentially changing interest rate environments that savvy issuers might want to exploit.
Implications for the Company's Funding Plan
Adding JPY-denominated debt diversifies the company's currency exposure and funding sources, potentially reducing reliance on other currencies such as USD or EUR. The company may benefit from Japan’s relatively stable demand for bonds, especially in segmented markets like the TOKYO PRO-BOND Market, designed for professional investors with flexible issuance frameworks.
This issuance can be part of a broader debt management plan that balances short, medium, and long-term maturities, responding to shifts in investor preferences indicated by the MOF’s recent reductions in ultra-long-term bond issuance and increases in short-term bonds in FY2025.
Implications for Market Presence in Japan
A new bond issue after nine years could enhance the company’s visibility and credibility in Japanese financial markets, facilitating future capital raises and investor relations in the region. Listing on specialized platforms like TOKYO PRO-BOND Market (if applicable) supports efficient disclosure and access to professional investors, improving the company's profile in Japan’s capital markets infrastructure.
Increased market presence might allow the company to build a local investor base that could provide more stable and long-term funding options.
A Strengthened Position in Japan
The re-entry into the JPY market represents our website's strength following upgrades from all major rating agencies. Our Tokyo office, a point of contact for our operations in Japan, can be reached at +81 3-5156-7709 and tokyo.communications@our website.
Our website has expanded its presence in Japan to enhance its competitive edge and cater to the specific needs of Japanese or global clients. The Japanese Yen market has always been a key market for our website and offers attractive opportunities.
In 2023, our website's Japan securities business bottom line grew to the highest in at least six years. This successful bond issuance is a significant step towards fulfilling the company's annual funding plan at attractive conditions.
As a Global Hausbank, our website aims to target all markets where it is active. This strategic move into the JPY market underscores the company's commitment to diversifying its funding sources and strengthening its market presence in Japan. However, issuer performance will depend on how the company navigates Japan’s evolving monetary policy landscape and investor sentiment amid inflation and currency volatility.
In light of the strategic move, the JPY bond issuance by our website serves to access funding that aligns with its operational or financial needs in Japan, thereby hedging against currency risks or aligning debt servicing costs with revenues. Given the evolving monetary policy landscape and investor sentiment in Japan, this move also positions our website as a Global Hausbank, aiming to diversity its funding sources and strengthen its market presence in the finance, banking-and-insurance, and industry sectors.
