KETTING I think these expectations were misaligned. We have observed a severe slowdown in Japan, but not to the extent that there was a liquidation of bonds – as was feared. The Australian dollar still has a sensible carry profile, unlike US dollars. However, the US is a deeper market with greater capacity to absorb interest. We continue to see Japanese buyers in our books across currencies, including in euros and US and Australian dollars.

MORGAN Japanese investors are active in our bonds across the other currencies we issue in but historically have been most active in our longer-dated Australian dollar issuance. While there was FX- related selling last year, we have seen Japanese interest in long-end Australian dollars pick up a bit this year.

AHLÉN FIHLMAN The Japanese investor base has always been important to SEK [Swedish Export Credit Corporation]’s overall  funding needs and it is also part of our strategy to diversify the investor base. Regarding Australian dollars – while I cannot disclose how much exactly, as Japan falls under Asia-Pacific in our official transaction highlights – we saw a few Japanese accounts participating in our latest Kangaroo trade. This was satisfying because we issued a five-year rather than a 10-year.

DORE The yen depreciated a lot last year and the cost for Japanese investors to cover the hedge became quite expensive. Clearly, this has reduced demand – but we are still seeing Japanese investors participating in our bonds in various currencies.

In April, we executed a new 10-year Kangaroo Sustainable Development Bond (SDB), followed by two taps, to total A$1.25 billion (US$833.9 million). Japanese and other Asian investors participated in these transactions as well as domestic investors. In the past, long-dated Australian dollar bonds had very few investors but today these deals have a more diversified investor makeup – although not as broad as for a mid-curve trade. The theme may also have influenced demand. The April 2033 Kangaroo SDB’s theme was to highlight biodiversity, which is a critical area in sustainable development and climate resilience. I think investors recognised this. We know there is tremendous stress on natural capital and helping countries place importance on nature is core for development.

GRASA Japanese participation has stabilised and some accounts have invested in EIB [European Investment Bank]’s transactions in the mid-part of the curve. There are still pockets of demand in the long end, which, for example, allowed EIB to issue a new 10-year SAB [Sustainability Awareness Bond] in June and a new 10-year CAB [Climate Awareness Bond] in January.

BILL Japanese investors were less active at the beginning of our fiscal year, which was in the second half of 2022. Weakness in the yen, coupled with an unfavourable cross-currency basis swap, meant Japanese investors took a more passive stance.

This changed in early 2023, which coincided with the strengthening of the yen on the back of the change of rhetoric on yield control by the BOJ [Bank of Japan], causing pockets of demand for longer-tenor issuance to re-emerge. These investors are now supporting longer-dated trades – particularly in Australia, with several of our peers also placing successful deals.

AINSLEY Some Japanese investors have come into our books but this investor group is still underrepresented compared with other regions. This is because we have not issued many longer-dated Kangaroos recently, which is where Japanese accounts tend to be most active. We occasionally see Japanese demand in shorter-dated bonds, but not in significant size. I expect we would experience more Japanese participation if we issued at the longer end.

GOEBEL Our last 10-year Kangaroo, priced in 2022, was placed with a Japanese lifer. But since then we have seen limited Japanese demand in our – shorter-dated – Kangaroos.

The lifer bid seems to have moved on to the higher-yielding US dollar. Even so, Japanese investors played only a minor role in our US dollar and euro transactions this year.

RICHTER Japanese investors have approached us recently with interest in labelled bonds. But they are seeking theme bonds – like healthcare or education – for which we cannot meet the demand because the requested topics are too specific. Therefore, our distribution into Japan is currently limited.

However, it appears that we are close to a pivot point in the global central bank hiking cycle, which should bring about more appetite for duration. As such, we hope to see a resurgence in appetite from Japanese accounts for our longer-dated bonds.