(Bloomberg) — Stimulus steps by the Bank of Japan this year are prompting issuance of longer debt to fall, to the detriment of fund managers chasing the extra yield on such securities.
Sales of company notes due in more than five years have dropped 38% in the fiscal year started April 1. Offerings maturing in shorter periods have jumped 35% to a record, according to Bloomberg-compiled data going back to 2009. The shift comes after the BOJ decided to lengthen the maturity of corporate bonds it purchases to five years from three years.
The central bank’s corporate debt buying, which it began in 2009 and expanded this year, has helped firms rushing to secure cash to ride out Covid-19. Company notes tend to be riskier than government bonds, so the BOJ’s focus on shorter maturities for the corporate securities helps it avoid locking into those for