Japan, which boasts the world’s biggest government bond market but “fortunately keeps most of its paper at home”, wants to ramp up overseas sales of JGBs and is kicking off with an investor road show to the Middle East, notes Lex on Friday.
Little wonder Japan is looking further afield for buyers. As RBS Securities Japan points out in a note on Friday, JGB retail sales in FY2008 dropped to Y2,300bn, the lowest since FY2003. More dismally, sales were around Y3,900bn less than the initial plan.
The vastly lower figure is due primarily to the low yields. In FY2009, the retail sales plan for JGBs in total is Y2,400bn. However, as RBS Japan’s research team notes, the absence of buying from retail investors will put further pressure on institutional investors.
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