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Finance Ministry mulls ‘samurai’ bond after recession news from Japan
The Finance Ministry says that the government had not decided whether to issue yen-denominated bonds after Japan unexpectedly fell into recession.
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Passersby walk past an electric screen displaying a graph showing Japan's Nikkei share average movements outside a brokerage in Tokyo on Feb. 13, 2024. The Indonesian Finance Ministry said on Feb. 23, 2024, that the government had not decided whether to issue yen-denominated bonds after Japan unexpectedly fell into recession. (Reuters/Issei Kato)
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he Finance Ministry has not yet decided whether to issue samurai bonds, government bonds (SUN) denominated in the Japanese yen, this year following news of recession in the East Asian country.
"Are we going to issue samurai bonds? Of course, we need to assess the demand, economic development and market situation in Japan," the ministry’s Budget Financing Director General Suminto Sastrosuwito said, on Thursday, as quoted by cnbcindonesia.com.
Suminto said the government's current approach was to observe Japan’s economy before deciding.
This cautious stance was grounded in the principle of minimizing the cost of funds while maintaining acceptable risks before issuing bonds.
Japan's economy contracted in the third and fourth quarters of 2023 at 3.3 and 0.4 percent, respectively, marking the onset of a recession.
The decline has caused Japan to lose its title as the world’s third-largest economy after the United States and China, with Germany now the third-largest economy in the world.
Indonesia has issued samurai bonds multiple times throughout the years. The most recent issuance occurred in May 2023, totaling 104.8 billion yen (US$691.7 million).
