Distribution of issued bonds in Japan 2023, by category

Japanese government bonds (JGBs) accounted for 88.3 percent of all bonds issued in Japan in 2023. Straight corporate bonds followed, reaching a share of 6.3 percent.

Bonds as a means of debt financing

Bonds are a form of debt financing. Companies or governments issue bonds to raise capital and investors receive interest on bonds until they reach maturity. The annual issuance amount of bonds issued by the Japanese government (JGBs) exceeded 200 trillion Japanese yen in the fiscal year 2022. The value of yearly issued corporate bonds in Japan has been relatively small.

Sustainable finance

Over the past decade, ESG (environmental, social, and governance) investment has emerged as a response to the growing awareness of sustainability issues. This includes ESG bonds: green, social, and sustainability bonds that raise funds for projects addressing environmental and social issues.
Since the first green bond in Japan was issued in 2014, the Japanese ESG bond market has grown significantly. The issuance amount of green bonds reached almost three trillion Japanese yen in 2023. While the sustainability bond market has been smaller, its growth accelerated in 2019, when issuance amounts more than doubled compared to the previous year.