One-Stop Introduction
The Japanese government bonds (JGBs) have a number of characteristics and benefits as a popular financial product:
1. PAYMENT GUARANTEED BY THE GOVERNMENT
As the name implies, JGBs are the bonds issued by the government of Japan, which is responsible for the interest and principal payments. Interest is paid every six months, and the principal payments are secured at maturity.
2. MATURITY FROM 2 TO 40 YEARS
JGBs are available with various maturity periods. Coupon-bearing bonds, which feature semiannual interest payment and principal payment at maturity, have maturities as below:
- Fixed rate coupon-bearing Bonds: 2, 5, 10, 20, 30 and 40-years
- Inflation-indexed Bonds: 10-years
- Japan Climate Transition Bonds: 5, 10-years
- JGBs for Retail Investors: 3, 5, 10-years
Note： Currently, fixed rate coupon-bearing bonds (2, 5, 10, 20 and 30-year) and JGBs for Retail Investors (3,5,10-year) bonds are issued every month, and 40-year fixed rate coupon-beaning bonds are issued every other month. 10-year Inflation-indexed bonds are issued once a quarter.
3. MARKET VALUE-BASED INTEREST RATES AND YIELDS
The interest rate (nominal coupon rate) of a JGB is basically decided according to its market value on the day of the auction, and will remain unchanged till maturity (except for Floating-Rate). 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 MINIMUM FACE VALUE
The unit face values of JGBs are:
10,000 yen: JGBs for Retail Investors (3-Year Fixed-Rate, 5-Year Fixed-Rate, 10-Year Floating-Rate)
50,000 yen: 2, 5, 10, 20, 30, and 40-Year,Treasury Discount Bills
100,000 yen: 10-Year Inflation-Indexed
There is no upper limit on purchases.
5. CAN BE SOLD IN THE MARKET
JGBs are financial products traded in the market. So, you don’t need to wait for maturity. However, except for JGBs for Retail Investors, please note that the sales price may be higher, or lower, than the original purchase price, depending on the market situation.
Note： When you hold JGBs till maturity, their principal amount will be paid.
For further questions, opinions, or requests on the JGBs, please contact us at :
Ministry of Finance, The Japanese Government/Feed Back