Japan’s public debt policy threatened by volatile yields

Author: Amélie Labbé | Published: 10 Mar 2017

The Bank of Japan (BoJ) may need to increase long-term bond yields, but doing so could disturb the country’s careful public debt management strategy. That was the message from panellists at the International Capital Markets Association’s (ICMA) March 8 Japan Securities Summit.

Japan has been in an on-and-off state of stagnation for the past few years, dogged by low consumer demand and investment, the lasting effects of the 2008 financial crisis on financial markets and an ageing population.

Takashi Nagaoka, director of the securities business division, supervisory bureau, at Japan’s financial services agency (JFSA), highlighted the dominance of the banking sector and an accumulation of household wealth in cash and deposits (around 50% of savings) as reasons why investment in the economy remains low. Savings directed towards equity and investment trusts are estimated to be at around 20%. This figure is 35% in the US.

Prime Minister...



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