Japan to issue $11B in climate transition bonds in Feb -sources

TOKYO  – Japan plans to issue 1.6 trillion yen ($11 billion) worth of climate transition bonds with five- and 10-year tenors in February, three people with direct knowledge of the matter said.

The first auction is set to be held mid-February for 800 billion yen worth of 10-year bonds, followed by an auction for the same amount of bonds with a five-year tenor, said the people on condition of anonymity as they were not authorized to speak publicly on the matter.

The plan will be finalized after a meeting this week with bond market participants.

The auction is part of Prime Minister Fumio Kishida’s plan to issue an estimated 20 trillion yen worth of “green transition” bonds to help finance investment to achieve a carbon-neutral society.

The move highlights efforts to seek alternative sources of energy after Russia’s invasion of Ukraine illustrated the risk associated with Japan’s heavy reliance on fuel imports.

The Ministry of Finance, which is in charge of bond issuance, was not immediately available to comment.

($1 = 147.1000 yen)