M&A boom in Japan is fueling record corporate bond sales

Corporate bond issuance in Japan is poised to breach a record this year on growing funding demand for mergers and acquisitions as the economy continues to move away from three decades of deflation.

The appetite for funds is outweighing concerns about the Middle East conflict after the U.S. and Iran failed to reach an agreement as the war enters its seventh week. Yen bond issuance in Japan has been unfazed, with sales rising 94% in March on a year earlier. That's more than four times faster than all global corporate debt combined, according to compiled data.

"We expect issuance to remain at a high level in the current fiscal year" because of funding needs for M&A, said Dai Otsu, head of debt syndication at Daiwa Securities. The brokerage was the third biggest underwriter of yen-denominated corporate bonds for the fiscal year just ended in March, data showed.

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