Aflac, the US insurance company, raised ¥60bn or $437m Yen loan. The company follows the increasing list of foreign borrowers willing to enter the low-cost liquid bank in Japan. Actually this is the second financing of Aflac. In the second year, they raised as much as ¥100bn. The company presents how attractive the Japanese loan market is, especially for the foreign borrowers. Plus, there is an additional situation when the country refuses monetary tightening globally.
In Japan however, Haruhiko Kuroda, the governor of Bank of Japan said that he has no plan to raise interest rates. Furthermore, he also has no plan to increase the implicit 0.25% cap set for the 10-year bond yield target. MUFG’s head of solution products and loan syndication, Takamisu Murakami gave an argument. He said that Japan focuses on the low interest rates during the monetary tightening in the west. In addition, he argues that Covid-19 ease and the normalisation of financial markets allow borrowers to reconsider. The reconsideration would specifically be in the diversification of funding sources beyond the home market.
The total of Yen denominated borrowings and foreign borrowings the first half of 2022 is $4.23bn. This is actually three times higher than $1.22bn from the first half last year. Due to the pandemic the Yen loan volumes raised $3.10bn in 2019. The loan volumes are from the four North American borrowers for $2.24bn. This is with the adds on from Aflac’s ¥100bn, Enbridge’s ¥84.8bn, PayPal Holdings ¥60bn, and Viatris’s ¥40bn.
Moreover, in July Carrier Global, the air-conditioning system marker, had an amazing debut in the Yen loan market. The market has raised ¥54bn five-year loan from the previous target of ¥46bn. The company finally attracted 21 lenders. Plus, the Singapore-based global energy company, Mercuria Asia Group Holdings has launched ¥55bn of Yen loan.