#Tokyo #interest rates #Investment trends #Siiibo Securities

Introduction

As 2025 unfolds, Japan's investment landscape is undergoing significant changes, driven by rising interest rates and volatile stock prices. Siiibo Securities, headquartered in Chuo, Tokyo, provides an annual white paper reflecting on the investment environment of the year, focusing on individual investors and their corresponding behavior in response to new developments.

Economic Context of 2025

Rising Policy Interest Rates

In January 2025, Japan saw the first rise in policy interest rates in 17 years. The end of the negative interest rate policy from the previous year has begun to affect everyday consumers and investors nationwide, marking a considerable shift in the financial climate.

Political Changes: The Takaichi Cabinet

This year also witnessed significant political events, including a change in the ruling party during the House of Councillors election and the rise of Sanae Takaichi as Japan's first female Prime Minister in October. The advent of the Takaichi Cabinet has led to phrases like “Takaichi Trade” emerging, reflecting market sentiments on new policies that stirred both anticipation and ambiguity.

Long-Term Interest Rate Fluctuations

The financial markets experienced substantial developments as the yen’s depreciation and rising long-term interest rates became focal points. Notably, the yield on new 10-year government bonds hit 1.89% on December 3, reaching a level not seen in nearly 17.5 years, prompting investors to pay close attention to interest rates.

Increasing Focus on Individual Investors

With the start of the new NISA in January 2024, more people began investing. In an era of persistent inflation, individuals understand that merely maintaining assets isn't enough, pushing them to embrace investment as a means to build wealth over the long term rather than for immediate returns.

Fluctuating Stock Market and Exchange Rates

The domestic stock market saw unprecedented swings, including a historic drop in April followed by its first-ever rise to the 50,000 mark in October. Moreover, fluctuations in the yen's exchange rate—from 139 yen to 158 yen against the dollar—indicated significant market dynamics influencing investor strategies.

Surge in Foreign Equity Investment Trusts

Research by the Japan Securities Dealers Association in July 2025 revealed a rising interest in foreign stock investment trusts, particularly those tied to U.S. equities in AI sectors that have shown strong returns, with investors willing to take on exchange risks for higher rewards.

Revitalization of Yield Investments

After years of negative interest rates, the end of this policy has generated renewed interest in yield-generating investments. The new environment has allowed for investment opportunities in government bonds, corporate bonds, and innovative products like crowdfunding, moving towards a more attractive yield-focused investment culture.

Introduction of Novel Yield Products

New investment vehicles, such as:
1. Trade Bond Investment Trust: Launched by Bayview Asset Management in April 2025, allows investments in accounts receivable bonds arising from trade transactions.
2. Real Estate Trusts: In May, FPG Securities offered an investment product for aircraft, traditionally aimed at institutional investors, now available to individuals.
3. Electric Bike Investment Trusts: In July, Mitsubishi UFJ Trust launched a trust allowing investments in electric-assist bicycles from share cycles.

Robust Growth in Individual Corporate Bonds

In 2025, the corporate bond issuance continued to thrive, with notable developments in individual bond offerings, including those from major companies like SoftBank Group and Aeon Co., demonstrating a robust response to growing investor appetite for safer yield options.

Digital Bonds Encouraging Investment Diversity

Innovations such as digital bonds allow for smaller investment thresholds, making them accessible to a younger demographic. In February 2025, Toyota Financial Services announced the issuance of a digital bond with exclusive benefits through the TOYOTA Wallet application.

Siiibo Securities’ Position in the Market

As an online securities company specializing in bonds, Siiibo Securities has noted a change in investor behavior reacting to market volatility by diversifying portfolios towards bonds as a risk mitigation strategy. The average investor can now invest in multiple bonds at once through Siiibo’s