Japan fund managers chase retail cash as JGB yields surge

After years of low returns, Japanese government bonds (JGBs) are attracting the attention of domestic asset managers who are creating investment options for retail investors. With yields on long-term JGBs now comparable to U.S. Treasuries and German bonds, Mitsubishi UFJ Asset Management, Daiwa Asset Management, and Amova Asset Management have all launched funds focused on super-long-term bonds.

Japan's 30-year JGBs currently yield close to 4 percent, surpassing Germany's 30-year yield of about 3.6 percent and nearing the 5.2 percent yield of U.S. Treasuries. While the funds are relatively small, their emergence signals a revival in the debt market that has been controlled by the central bank for over a decade.