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Given the scale of the task at hand, few should begrudge Prime Minister Abe more time to meet the objectives of his courageous programme to rejuvenate Japan’s moribund economy.

In theory, the Bank of Japan’s gargantuan asset buying programme, which forms a central pillar of its quantitative and qualitative easing policy, should transform international capital markets by forcing Japanese investors overseas en masse. But as so often is the case in Japan, theory and practice are very different things.

Given the low cost of debt, sluggish domestic growth and poor demographic trends, it is inevitable that international M&A will continue to increase as Japanese corporations’ management looks for growth beyond Japan to boost returns and growth prospects. This is good news for debt markets, which have also been boosted by an increase in the amount of share buy-backs.

Despite the problems that negative interest rates bring to a banking sector, Japan’s financial institutions have more to gain from a stronger economic environment than they have to fear from monetary policy. Given the progress they have made in strengthening their capital bases they appear well placed to see out such unhelpful policy, even if it lasts for longer than many hope.

Established in 2011 as a means of providing borrowers with easier access to a marginally more restricted investor base than the Samurai market, the Tokyo Pro-Bond market has had mixed fortunes in its five year history. While it has attracted a diverse range of borrowers, overall volumes have perhaps not lived up to expectations. The Tokyo Pro-Bond market has, however, firmly established its credentials as an alternative to the Samurai market, and market participants remain optimistic about its long-term prospects. Participants in the GlobalCapital Pro-Bond roundtable were:

Samurai issuance by borrowers from the Asia Pacific region fell from 47% in 2011, when Australian banks accounted for almost a third of issuance, to 16% in 2015. Nevertheless, it is clear that the region will have a key role to play in the evolution of the Samurai market in the years ahead. In the Asia Pacific Issuers Roundtable, borrowers discuss their experience in the Samurai market and look forward to likely developments over the coming few years.

It is one of the great ironies in the global capital markets that despite the long history of deep demand for ESG bonds in Japan, Japanese issuers have themselves been reluctant to issue.

Supranational and agency issuers were the early adopters of the SRI bond format, creating a market and developing standards for others to follow. While other sectors are enjoying the fruits of those labours, the SSA pioneers are still focused on bringing further innovations — from the development of social bonds to higher reporting standards, to the introduction of the last ‘S’ in the acronym: sovereign issuers. GlobalCapital brought together many of those market leaders, together with bank experts and SRI investors, to discuss the latest innovations and the growth of the market.

With political and regulatory efforts putting sustainable and responsible investing in the spotlight, investors are racing to develop SRI strategies. The market is only just keeping up with the growth in demand, market players tell David Bell.

At around $700bn, the climate-aligned bond universe is less than 1% of the entire bond market. A goal of growing that to even 10% is a lofty one, but entirely necessary if the world wants to meet its climate goals, writes Graham Bippart.

The green bond market began with deals from only the world’s top credits. But now, companies and financial institutions are a growing part of the sustainable bond world. Their commitment to the sector will be crucial in helping it reach full capacity — a necessity if the monumental task of financing the world’s transition to sustainability is to be achieved before it’s too late. But the market is still in its nascent stages, and there is much work to do before even senior unsecured green bonds are standardised, giving both issuers and investors the confidence in the asset class needed to scale it up effectively. GlobalCapital sat down with 13 market professionals on the sidelines of the Euromoney/GlobalCapital Sustainable & Responsible Capital Markets Forum in Amsterdam in September to talk about the big issues in the market.

The social bond market, although still young, has benefited from increased global investor demand for SRI assets and already boasts notable success stories. If market participants follow the lessons of green bonds, a promising future lies ahead. Ross Lancaster reports.