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First Yuan bond sales in Japan
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JAPAN'S biggest banking group Mitsubishi UFJ Financial Group Inc plans to sell yuan bond in Japan, or the first such sales, starting from June 24, the company told Shanghai Daily today.
Bank of Tokyo-Mitsubishi UFJ, the main lending unit of the company, will manage a private offering of a two-year yuan-denominated bonds which worth about 350 million yuan (US$56.3 million), said company's spokesman Kazunobu Takahara.
The two-year yuan bond will be sold at with annual yield at 3.64 percent, similar to the rates in major offshore markets such as Hong Kong, the bank said.
The private selling will be limited to some institutional investors including life insurance companies and local banks.
The offering comes after an eased tension between China and Japan as Chinese President Xi Jinping met with Japan's Prime Minister Shinzo Abe last month, and Chinese Finance Minister Lou Jiwei called for an "actively promoting practical cooperation with Japan in yuan bond issue" in a resumed bilateral Finance Minister summit on May 6.
“Issuing yuan-denominated debt in Japan this time is an implement of mutual supporting policy signed by both leaders four years ago,” Takahara said, “We hope to help nurture a yuan market in Japan with the issuance.”
The issue also linked to China's growing efforts to internationalize its currency since 2009, Takahara noted, adding that China is poised to free up capital-account transactions and is moving to slash a requirement for pre-approval of exchanges of yuan for other currencies.
“China wants to see issuers raising yuan debt not just locally, but in diverse locations to promote globalization,” Bloomberg News citing Mana Nakazora, the chief credit analyst in Tokyo at BNP Paribas SA. “Local Japanese banks are lending to clients entering China, so there are needs for yuan.”
Yuan's share of worldwide payments reached 2.1 percent in April, up from just 0.3 percent three years earlier, while offshore issuances of yuan bonds grew by 50 percent to 460 billion yuan in 2014, according to SWIFT, a global telecommunications network for banks.
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