While the Bank of Japan kept interest rates unchanged, the 5-year government bond yield fell to 2.237% at the end of October. The article compares the interest rate on Japanese government bonds for individuals with stock dividend yields and reports that the rate for the November offering is scheduled to be published on 6 November.
At its monetary policy meeting on 30 October, the Bank of Japan left interest rates unchanged, maintaining its policy of guiding the unsecured overnight call rate to around 1.25%. Government bond yields continued to decline during the month, with the 5-year yield falling to 2.237% on 30 October.
The 10-year government bond yield also fell, from 3.092% at the beginning of the month to 2.817% at month-end. The fixed 5-year rate for Japanese government bonds for individuals is set by subtracting 0.05% from the benchmark rate. This month's rate is expected to be at the previous level, but confirmation awaits the publication scheduled for 6 November.
The article compares the interest earned on an investment of ¥1 million at the fixed 5-year rate for the October offering, 2.39% per annum, with dividends from shares whose dividend yields are close to that rate. It also notes that Japanese government bonds for individuals are not eligible for NISA and that government bond interest is subject to 20.315% tax.