Rare 30-year floater shows Japanese investors changing tack

摘要

The longest floating-rate note in Japan's domestic debt market has provided an early indication that the country's economic reforms are prompting a change in investment strategy. In a market dominated by fixed-rate government bonds, the 30-year FRN from government-owned japan finance organization for municipalities is a Sign that some investors are betting that Prime Minister Shinzo Abe's policies will usher in an era of higher interest rates and succeed in pulling the country out of 15 years of deflation. JFM, one of Japan's most frequent quasi-sovereign borrowers, printed a ¥10bn (US$97.7m) 30-year floater on February 19 at 16bp over three-month yen Libor, equal to about 20bp over Japanese government bonds. Bank of America Merrill Lynch acted as sole bookrunner.