Japanese asset managers, including the units of Mizuho and Nomura, are rushing to launch bond funds to meet soaring interest in Japanese debt as higher interest rates mean attractive yields for the first time in decades.

Market Growth

The market is deepening as more Japanese firms issue bonds as a source of growth financing and Japan’s asset managers are banking on their expertise in the corporate bond market to attract funds from investors slowly upping their allocation to yen-denominated debt.

A yen bond fund established by the asset management arm of Mizuho Financial Group, Asset Management One (AMO), has secured its first mandate to manage funds on behalf of a Western institutional investor, two people familiar with the matter said.

Competitive Advantage

Corporate bonds are a differentiating factor for domestic asset managers as others lack the knowhow to analyse Japanese companies’ debt, said AMO’s Takeshi Miki.

Overseas investment in yen-denominated bonds has picked up after the Bank of Japan started normalising policy in 2024, allowing bond yields to trend higher.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.