Japan

It has been a momentous year in the yen market. Having long been seen as a very traditional and conservative part of the financial world, Japan has been embracing change.

GDP has bounced back in Japan, but the country faces some stubborn problems, some long-standing — such as low inflation, consumption tax rollout and an ageing population — and some new, including an increasingly protectionist US. Philip Moore reports.

The Japanese issuer base for socially responsible investments (SRI) is growing steadily, with some borrowers adding social and sustainability bonds to the already busy green bond market. On the buy-side, an investor base well versed over many years in SRI is also taking to the asset class.

From Tokyo to Osaka, from Kyoto to Sapporo, Japan is going green. Or at least, its bonds are. After issuing just one green bond in 2014, Japan has made itself home to repeat issuers of socially responsible investments and sowed the seeds for environmentally conscious funds. But as the country continues to turn its attention to environmental, social and governance issues, it still faces an uphill battle of education and reforms to build a sustainable bond market. Morgan Davis reports.

Japan’s investors are hungry for yield. The likes of the Government Pension Investment Fund and the country’s regional banks, are going farther afield and widening their scope to include emerging markets as they hunt for returns. Jonathan Breen reports.

Kate Birchall, the former head of portfolio optimisation and collateral at National Australia Bank, has been chosen by LCH to lead the Asia Pacific operations of its London-based clearing house LCH Limited.

Japanese issuers are rarely seen in the European corporate bond markets, but electric motor manufacturer Nidec made it two Japanese corporate bond sales in two days, following Japan Tobacco’s multi-tranche deal on Wednesday.

Rating: A1/A+

Japan Tobacco took the rare step of issuing corporate bonds in three different currencies on the same day when it sold its debut euro and sterling bond deals alongside a pair of dollar tranches this week. The unusual move proved to be a successful one however, with each tranche at least three times subscribed.

Toyota may be a familiar name in the corporate bond markets, but Toyota Motor Finance Netherlands BV stepped out of the shadow of some of its parent company’s better known subsidiaries to issue its first benchmark bond in a major currency.

Sumitomo Mitsui Trust Bank brought its debut euro deal to the market on Tuesday as it looked to diversify its funding, racking up more than €2.3bn of demand.

Japanese issuers are not frequently seen in the European corporate bond markets, but this week could have two companies going head to head with benchmark euro transactions. Japan Tobacco will sell its first new issues in Europe, while Toyota is better known to investors on the continent.