#Japan #Tokyo #Daiwa Securities #JST #University Fund

Daiwa Securities Launches New Bond for Science and Technology

Daiwa Securities Co., Ltd., headquartered in Chiyoda-ku, Tokyo, has announced that it will underwrite the sale of the 5th Science and Technology Promotion Agency (JST) bond, which is set to be issued in February 2027. This initiative targets corporate investors across Japan and aims to bolster the funding landscape for higher education.

The JST is a national research and development agency with the mission to promote science and innovation, underscoring the motto, "Supporting Science, Connecting to the Future.” The organization plays a crucial role in empowering scientific capabilities across multiple disciplines, ultimately aiming for a safer and more affluent future for society.

Recent years have seen Japanese universities stagnate in research output, attributed mostly to financial constraints. In contrast, prestigious universities in Europe and the United States have successfully utilized substantial endowments to enhance their research faculties and attract young researchers—creating new fields of study and fostering innovations. Japan's universities, constrained by smaller funds and inadequate management systems, are striving to bridge this funding gap through a significant university fund established with government support, and the JST is tasked with its management.

The university fund scheme was initiated to align with missions outlined in the frameworks set by relevant government ministries. As such, in February 2025, JST allocated approximately 15.4 billion yen to Tohoku University, recognized as an international research hub. In March, about 16.7 billion yen was distributed to eligible universities for supporting doctoral students. Furthermore, the government-backed “J-RISE Initiative” aims to attract and support outstanding young researchers from overseas, which also received funding support in November of the same year.

Looking towards 2026, JST expects to extend financial assistance to the newly designated international research university, Tokyo Institute of Science.

Overview of the 5th JST Bond

According to regulatory provisions set forth by the Act on the Japan Science and Technology Agency, this bond will serve as a key funding mechanism for the university fund.

• - Name: 5th Science and Technology Promotion Agency Bond
• - Term: 2 years
• - Issuance Amount: 20 billion yen (with individual bond values set at 10 million yen each)
• - Target Purchasers: Corporate investors, including businesses, foundations, and educational institutions
• - Expected Issue Date: February 2027
• - Lead Underwriters: Nomura Securities, SMBC Nikko Securities, Daiwa Securities
• - Credit Rating: Anticipated AA+ from R&I (Rating and Investment Information, Inc.)
• - Issuance Method: Pot method

The funds raised through this bond will be allocated to the operational resources of the university fund project. For detailed information regarding the bond and purchasing procedures, interested parties are encouraged to contact Daiwa Securities’ service desks nationwide.

Considerations for Investors

Investors should be aware of transaction fees and potential risks associated with the purchase of securities, particularly when engaging in domestic and foreign transactions, which come with varying commission structures.

Daiwa Securities emphasizes the need to carefully assess the unique risks of each type of investment, including possible price fluctuations tied to underlying assets, and foreign currency movements. Investors are also advised to review relevant prospectuses and disclosures before engaging in any trading activities.

As a licensed financial services provider, Daiwa Securities is committed to maintaining transparent communication with its investors and adheres to all regulatory frameworks established by Japanese financial authorities.