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The government is going direct to households to finance March 11 disaster rebuilding, offering interest payments about a third lower than what it pays institutional investors.

Three-year reconstruction bonds for sale next month will pay a 0.18 percent rate, compared with 0.3 percent on reference five-year notes sold to banks. Investors will also get a letter of appreciation from Finance Minister Jun Azumi. Five-year debt in the U.S. has a 1 percent coupon.

The ministry has used Twitter and advertisements in taxis to pitch so-called retail Japanese government bonds, which are set for the biggest annual sale in three years. Rates higher than the 0.05 percent offered on standard bank accounts enticed buyers looking for safer investments as the Topix sank 20 percent this year. Japan boosted planned offerings of the securities, reducing its reliance on debt sold to banks.

“If JGBs sold to individuals increase, this will weaken issuance pressure for auctions,” said RuiXue Xu, a strategist at RBS Securities Japan Ltd., one of the 25 primary dealers obliged to bid at government-debt sales. “This is positive for JGBs and will likely be a downward factor for yields. If you can receive a letter from the finance minister, I think it will encourage investors to buy.”

Sales of JGBs to individual investors with maturities of three, five and 10 years totaled ¥1.5 trillion from April through November, the most since fiscal 2008, according to the Finance Ministry. The government said last month it plans to boost offerings by ¥1 trillion to total ¥3 trillion in the year ending next March.

Securities targeted at banks, insurance companies and other institutional investors will rise by ¥800 billion, less than 1 percent of the estimated ¥145.7 trillion in such debt to be sold this year.

The government revised its bond plan as Prime Minister Yoshihiko Noda approved a third supplementary budget totaling ¥12.1 trillion on Oct. 21 to support an economic recovery from the March 11 quake and tsunami. The Upper House ratified the spending package Monday. The nation’s growing debt load, twice the size of the economy, has highlighted the need for fresh investors.

The bonds “will directly support reconstruction,” Azumi said at a news conference Friday. “I personally want to buy them for myself, though whether I will be pleased with receiving my own thank-you letter is a separate issue.”

The government will issue the debt Dec. 15. It sells fixed-rate three-year notes every month and five-year and 10- year debt on a quarterly basis. The securities can be purchased in denominations as small as ¥10,000.

An offering of 0.17 percent coupon three-year retail notes received bids worth ¥82.7 billion this month, the highest since August. Japan’s 10-year yield fell to a 12-month low of 0.940 percent last week, the second-lowest among developed nations after Switzerland’s.

Japanese individuals flush with cash may help drive demand for government bonds, according to Takahiro Sekido, who worked at the BOJ for more than a decade before becoming chief Japan economist at Credit Agricole CIB in Tokyo.

Household assets totaled ¥1.491 quadrillion at the end of June, according to central bank data. Cash holdings and bank deposits made up more than half of the total, while JGBs comprised 2 percent.

“In Japan, there is a huge amount of cash, so the demand for JGBs looks very strong,” Sekido said. “Such a cash surplus continues to fund government debt.”

Sekido said he may suggest buying reconstruction JGBs to his wife, who “should make most of the decisions” on their investments, he said. “I think she’ll be happy to receive the letter from the finance minister, so that’s one of the options within my household.”

Japan has appealed to households in the past to boost demand for government debt, forecast to reach more than ¥1 quadrillion this fiscal year.

Actress Koyuki, who appeared in the 2003 film “The Last Samurai” with Tom Cruise, and Junko Kubo, a former anchor on NHK, have appeared in Finance Ministry posters in past years to sell bonds to households. The ministry ran magazine ads last year with banners saying “Men who hold JGBs are popular with women!”

A bow-tied mascot of the Finance Ministry named Kokusai Sensei, or Dr. JGB, started tweeting about the benefits of the bonds in June as the nation revised how it pays interest on floating-rate 10-year notes.

Payments are now determined by multiplying the reference rate, based on 10-year auction yields, by 0.66.

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