As interest rates rise to their highest levels in nearly three decades, Japan's corporate bond market is undergoing changes. Although higher rates have increased financing costs for issuers, they have also prompted investors to shift toward fixed-income securities, triggering a new wave of capital flows. Noriaki Nomura, head of Mitsubishi UFJ’s debt capital markets division, stated that as Japan returns to an inflationary environment, companies are prioritizing capital expenditures to drive rev

As interest rates rise to their highest levels in nearly three decades, Japan’s corporate bond market is undergoing changes. Although higher interest rates have increased financing costs for issuers, they have also prompted investors to turn to fixed-income securities, thereby triggering a new round of capital flows. Noriaki Nomura, Head of Debt Capital Markets at Mitsubishi UFJ, stated that as Japan returns to an inflationary environment, companies are prioritizing capital expenditure to drive revenue growth rather than cutting costs. As of March this year, the total corporate bond issuance has reached a record 16.7 trillion yen (approximately $103 billion). Although securities firms calculate issuance volumes in different ways, based on their own estimates, most forecast that the total issuance for this fiscal year will be roughly in line with last year’s level.