NewsBite analysis · Business
The Japan Times
Japan’s convertible bonds regain favor as rates continue to rise
Japanese companies have issued convertible bonds at unprecedented levels in the first half of the year, surpassing ¥1 trillion ($6.2 billion). This surge is attributed to rising interest rates, following the Bank of Japan’s shift from negative rates and a recent increase in its benchmark rate. Major deals, such as Nippon Steel's ¥600 billion bond sale, have contributed to this record volume. The trend reflects a growing preference for cheaper financing options in a tightening economic environment.
MonitorConfidence: HighShort term horizon
Published 3 Jul 2026, 02:45 UTC1 min read
Visit original article ↗Lead image — The Japan Times
Summary
TL;DR
- Japanese companies sold ¥1 trillion in convertible bonds in the first half of 2026.
- This marks the highest issuance in over 20 years.
- Nippon Steel led with a ¥600 billion offering, the largest for Japanese convertible bonds.
- Interest rates in Japan have risen, with the central bank raising the benchmark to 1%.
- The trend follows the Bank of Japan's end to negative interest rates.
Interesting facts
- The recent issuance is the highest for the first half since 2004.
- The 10-year government bond yield is at its highest since 1996.
- Convertible bonds allow companies to offer lower coupons with potential equity upside.