Question One: How big is Japan’s local currency bond market? How does it compare to China’s bond market?
The size of the local currency bond market in Japan (tracked by the S&P Japan Bond Index) stood at JPY 1,154 trillion as of Jan. 27, 2016, which is equivalent to USD 9.7 trillion. It is 1.7 times the size of the local currency bond market in China, as measured by the S&P China Bond Index. Japanese sovereign bonds represent over 70% of market exposure; the current yield-to-maturity of the S&P Japan Sovereign Bond Index is 0.22%, compared with 2.83% for the S&P China Sovereign Bond Index.