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Coupon rate for new 10-year Japan gov't bonds stays at 0.8%


The Finance Ministry on Tuesday left the coupon rate for new 10-year Japanese government bonds unchanged from June at 0.8 percent, given that yields on the country's sovereign debt in the market have been hovering around that level in recent days.

In an auction, the No. 329 issue of benchmark long-term bonds drew 5,260.3 billion yen in bids, of which the ministry accepted 2,184.7 billion yen. The debt will be issued on July 4 and will mature on June 20, 2023.

The coupon rate is the interest rate stated on bonds at their issuance. Interest rates move inversely to bond prices.

Looking ahead, recovery in Tokyo shares and growing speculation over the U.S. Federal Reserve reducing the pace of its asset purchases could make investors reluctant to boost their holdings of Japanese government debt, analysts said.

But demand for the debt is unlikely to drop soon as the Bank of Japan has pledged to buy more than 7 trillion yen worth of government bonds every month, aiming to keep longer-term interest rates low, they added.