As a popular financial product, government bonds have a number of characteristics and benefits.

1. PAYMENT GUARANTEED BY THE GOVERNMENT

As the name implies, government bonds are the bonds issued by the government, which is responsible for interest and principal payments. Interest is paid every six months, and principal payments are secured at maturity.

2. MATURITY FROM 2 TO 40 YEARS

Government bonds are available with various maturity periods. Coupon-bearing bonds, which feature semiannual interest payment and principal payment at maturity, have maturities of 2,5,5(for retail investors),10,10(inflation-indexed),10(for retail investors),15(floating-rate),20,30 and 40 years.

 Note. Currently, in the coupon-bearing category, 2-year, 5-year, 10-year and 20-year bonds are issued every month;30-year bonds are issued every other month; and 40-year bonds are issued once a quarter.

3. MARKET VALUE-BASED INTEREST RATES AND YIELDS

The interest rate (nominal coupon rate) of a government bond is decided according to its market value at the time of issue, and will remain unchanged till maturity. Yield to maturity is calculated based on the purchase price (expressed per ¥100 of the face amount), the nominal coupon rate, and the maturity (the period between purchase and redemption).

4. AVAILABLE AT A RANGE OF FINANCIAL INSTITUTIONS

Japanese government bonds are a popular financial product that can be purchased at various financial institutions, such as banks, securities companies, shinkin banks, and Japan Post Bank.

Note. As availability can vary by the types of bond or timing, please confirm at your nearest financial institution.

5. AVAILABLE AT A MINIMUM FACE VALUE

The unit face values of Japanese government bonds one can purchase are

10,000 yen: JGBs for retail investors (10-year floating-rate, 5-year fixed-rate)

50,000 yen: 2-year, 5-year, 10-year, 20-year, 30-year, 40-year

100,000 yen:15-year floating-rate, 10-year inflation-indexed

10,000,000 yen: Treasury Discount Bills

There is no upper limit on purchases.

6. CAN BE SOLD IN THE MARKET

Japanese government bonds are a financial product traded in the market. So, you don’t need to wait for maturity. Depending on the market situation, however, the sales price may be higher, or lower, than the purchase price.

Note. When you hold government bonds till maturity, their principal amount will be paid.

For questions, opinions, or requests on government bonds, contact us at :
Ministry of Finance, The Japanese Government/Feed Back