The first Japanese government bonds specifically targeting individuals moved quickly on Monday, the first day investors were allowed to place orders for them at commercial banks, securities houses and post offices.
Post offices sold out of the 50 billion yen worth of bonds they were scheduled to sell, and some financial institutions also reported that orders had reached their limit, according to Vice Finance Minister Masakazu Hayashi.
“The bonds are being evaluated positively by investors,” Hayashi said, “and we are grateful about that.”
Private-sector financial institutions are scheduled to sell 330 billion yen worth of the bonds, orders for which are being accepted on a first-come, first-served basis. The bonds will be issued March 10.
Some investors placed their orders in person, while others did so by phone.
“It will be the first time for me to make an investment,” said a 33-year-old female company employee at a major bank in Tokyo. “I came just to hear what it was about, but I will consider making a purchase.”
The 10-year bonds feature privileges unavailable with regular bonds, such as a floor coupon rate of 0.05 percent, which guarantees interest for investors even if market rates plunge sharply.
The government will also fully guarantee the principal, except for cancellations less than one year after purchase, and subscriptions can be made in units of 10,000 yen instead of 50,000 yen, as required with regular bonds.
The first interest payments for the floating-rate bonds will be made in September at a coupon rate of 0.09 percent per year. Coupon rates will be reset twice a year thereafter. , based on auction results of regular 10-year government bonds.
With assets being shifted from stocks to government bonds amid the sinking equities market, the industry has pinned high hopes on the new bonds.
“We expect government bonds targeting individual investors to become popular as a new investment product,” said an official at a major securities firm.
Orders will be accepted until Feb. 21. Regional banks, credit unions, agricultural cooperatives and online brokerages are also taking orders.
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