The earth quake and the subsequent Tsunami in Japan caused turbulence in the orate bonds market. But, the severe consequences have now subsided, as corporate bonds are recovering with companies venturing on fund recovery activity.
I-N information system, a financial information company based at Tokyo, reports that Japan is mending their debt issues in constructive, structured ans statistical ways. The total bonds issued by the corporates in July amounted to 981 billion Yen. This figure indicates that the amount is just the double of what was issued in April. Just after the March disaster, it touched the highest level in the last 10 months.
Tsunami hit Fukushima Daiichi nuclear power plant on March. Subsequently, this natural calamity caused to the deepening of speculation about the corporate earnings. This incident affects the yields of corporate bonds, which makes it difficult for companies to issue their debts.
According to I-N information, the issuance of corporate bonds in April came down to 515-4 billion yen which is the lowest figure since 1996.
However, gradually the amount kept on increasing and the market restored to 600 billion yen in the month of May and June. Eventually in July, the issuance raised to 1 trillion as thirty three companies discharged corporate bonds with 33 companies issuing bonds, which was only nine in April.
As nuclear power plants were badly hit by Tsunami, electric power companies began losing credibility in the market. Therefore, people refrained from purchasing their bonds. So most electric power companies stalled for sometime in issuing bonds. Only Okinawa Electric Power Co. did not hold backin issuing their bonds because it was not powered by nuclear plants. It also did not own any nuclear plants.
