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Japan’s First Minus-Yield Agency Bond Prices as Rates Plunge

  • Japan Student Services’ note yields around minus 0.0005%
  • More such agency bonds may follow, Manulife’s Oshida says
The Bank of Japan (BOJ) headquarters stands in Tokyo, Japan, on Wednesday, Sept. 13, 2017. The BOJ\'s next monetary policy meeting is scheduled for Sept. 21. The central bank pushed back in July the projected timing for reaching its 2 percent inflation target for the sixth time as economic growth failed to drive price gains.
Photographer: Akio Kon/Bloomberg
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A Japanese agency priced a bond with a negative yield for the first time, in a sign that such debt sales may increase in the nation amid the global tumble in interest rates.

Japan Student Services Organization priced 30 billion yen ($281 million) of two-year notes with a coupon of 0.001% and a price of 100.003 yen, working out to a yield of around minus 0.0005%. While government-backed organizations have sold debt yielding less than zero in auctions in the past, this was the first public offering of such a bond by an agency, Bloomberg-compiled data showed.