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Development of the Japanese Bond Market

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The world is growing so fast and everybody needs to achieve high goals, money and fame in limited time. For being on top, every person does their best – hard work, efforts and sincerity can only lead a person towards the top. Every field requires day to day changes and updating. The investment industry is not as high profile as it used to be following the global economic crisis but some industries are still up on their feet.
There is a number of features of bonds, some of them are briefly discussed below: nominal amount, issue price, maturity date, coupon, coupon dates, indentures and covenants sinking fund, options. There are different types of bonds available in the market, each of which has its own features and requirements. Bond by foreign entities brings new and wide ways of earning money.
Japanese bonds are sold by the Japanese government which offers a number of bonds including revenue bond and subsidy bonds. Japanese bonds are much similar to treasury bonds which are widely sold in the United States under the provision of government. Japan has faced lots of problem in the market including a number of risks. Bonds sold by foreign markets always have a great scope and region for earnings. There is always low credit spreads on Japanese bonds especially BBB related bonds. CAPM is an additional risk factor in the market faced by Japanese bond. Under Y-CAPM -risk and -risk can be determined (Bank of Japan, 2000). The estimated Wright of -the risk was 2.6 % in Japan and on the other hand, it is compared with 12.5 % in the United States. The big difference between lower degrees of relative risk reflects the risk aversion in Japan. The key problem of Japanese bond is always the policies of the Japanese government. Rate of bonds in international markets reflects a lot in the economy of the country. In the case of Japanese bond deficiency, it highly affects the economy of Japan and it shows the competitiveness and performance of Japanese firms (Paul, 2001). This change highly reflects the generally priced risk in Japan. Basically, in the Japanese market, two models are applied i.e., conditional model and unconditional model.&nbsp.