Skip to content

Record-Level Risk Aversion Hits Japan Credit as Yen Drops

  • Utility bonds made up a record 65% of Japan deals in April
  • ‘Investors feel safe’ buying power company bonds: JCR’s Ono
Bloomberg business news
WATCH: The yen looks set to extend its decline for a seventh consecutive week. Ruth Carson reports.Source: Bloomberg
Updated on

Risk aversion, the likes of which hasn’t been seen in recent decades, is slamming Japan’s usually staid corporate bond market as climbing yields and the yen’s plunge to a 20-year low limit debt sales to some of the safest, most conservative issuers.

An astonishing fact emerges when debt sales data for Japan’s fiscal year started this month are examined: issuance by power utilities made up fully 65% of all deals, the highest proportion for any April or year in Bloomberg-compiled data going back to 1999. By comparison, those firms, all with investment-grade scores from local rating firms, comprised 16% of all offerings last fiscal year.