Japan

The Inter-American Development Bank made an early claim on Monday for a spot in this week’s dollar issuance, in what its leads said was a move to ensure it did not add its name to a growing trend for SSA deal clashes.

Monetary policy and declining oil prices caused unusual currency correlations in recent quarters, say bank analysts, but changes in sentiment around developed market currencies and the prospects for US inflation look set to send those measures back toward normal levels.

The Bank of Japan’s decision to cut interest rates below zero has already had an impact on the ability of bankers to generate cross-border deals. But the wider ramifications of the move may be reflected in the domestic bond market. Matthew Thomas reports.

Since Shinzo Abe was elected as prime minister in December 2012, ‘Abenomics’ has been a buzzword for international and domestic investors alike. Abe’s determination to turn the Japanese economy around, combined with the aggressive style of his hand-picked central bank governor, has brought unprecedented attention to Japan in a time of global volatility. That makes the job of communicating the strengths of the Japanese economy to investors all the more important. GlobalCapital sat down with Eiko Kimata, director for debt management and JGB investor relations at Japan’s Ministry of Finance, on March 11 to find out how investors have reacted to the central bank’s recent move into negative interest rates, how international investors are viewing the potential of the Japanese economy, and how the Ministry of Finance can best approach a tricky funding environment.

Japan’s top-rated credits are used to getting a captive audience from international investors, cheap spreads at home and their choice of funding markets. But the global volatility that has defined the financial markets over the last few years has made things tough even for these well placed issuers. GlobalCapital sat down with some of the most highly-regarded issuers in Japan, as well as respected senior bankers, to discuss how these issuers can best approach the debt markets.

The Bank of Japan has proven itself to be among the most aggressive central banks in the world over the last few years. But the central bank went a step further in February, pushing interest rates below zero. Investors and issuers are still struggling to figure out just what the policy means for them. Matthew Thomas reports.

The Japan Finance Organisation for Municipalities picked banks on Tuesday for a forthcoming dollar deal, while bankers said that the dollar market is likely to shrug off any announcements from a speech by the US Federal Reserve chair later on Tuesday.

Sumitomo Mitsui Finance and Lease Co issued on March 23 ¥5bn ($44.1m) of six month commercial paper with a yield of -0.001%, becoming Japan’s first private company to sell negative yielding debt.

Deutsche Bank has hired Jason Cox as a co-head of equity capital markets for Asia Pacific, as the bank lays out the management structure for the region.

Keihan Electric Railway Co joined on Thursday in the recent spate of Japanese convertible issues sold outside Japan. Like Fuji Machine Manufacturing Co’s deal the previous day, the bond was a debut CB issue, and will be used entirely to finance a share buyback the following day.

Fuji Machine Manufacturing issued a ¥10bn ($89m) convertible bond on Wednesday, selling it outside Japan. Mizuho led the deal, which was priced at the top of the range, eight times oversubscribed.

Japanese convertible bond issuance in the European market has been quiet so far this year, but kicked on sharply on Monday when Suzuki Motor Corp launched a ¥200bn ($1.75bn) deal that one banker said was the largest since 2011.