To buy Japanese Government Bonds, you open a book-entry transfer account at a Japanese securities firm, commercial bank, or Japan Post Bank, then place an order during a monthly subscription window or on the secondary market. Retail-oriented bonds start at 10,000 yen; institutional issues start at 50,000 yen. All ownership is recorded electronically under the Act on Book-Entry Transfer of Corporate Bonds and Shares, so no paper certificate ever changes hands.1Japanese Law Translation. Act on Book-Entry Transfer of Corporate Bonds and Shares The rest of the decision is choosing which type of bond fits your horizon and understanding what happens if you need the money back early.
What You Can Actually Buy
The Ministry of Finance issues JGBs across several maturity categories, and only some of them are practical for individual buyers.2Ministry of Finance Japan. Debt Management Report 2024 – Chapter 2 Section 1 The most accessible product is the JGB for Individuals line, which comes in three forms: a 3-year fixed-rate bond, a 5-year fixed-rate bond, and a 10-year floating-rate bond whose coupon resets every six months against prevailing market yields. All three carry a minimum interest rate of 0.05% per year, a floor that keeps the coupon from falling to zero in ultra-low-rate periods.3Ministry of Finance Japan. Debt Management Report 2023 – Chapter 2 Section 1 Interest pays twice a year and the government guarantees full face value at maturity. Minimum purchase is 10,000 yen, with additional purchases in 10,000-yen increments.4Ministry of Finance Japan. About JGBs
The institutional side of the market includes 2-year and 5-year medium-term bonds, the 10-year benchmark, super-long-term 20-, 30-, and 40-year issues favored by insurers and pension funds, 10-year inflation-indexed bonds (JGBi), and climate transition bonds at 5 and 10 years. Treasury Discount Bills of up to one year are sold at a discount rather than paying periodic interest. Coupon-bearing institutional bonds start at 50,000 yen; JGBi requires 100,000 yen. Retail investors can buy institutional bonds too, but they are more commonly bought and sold on the secondary market than through primary auctions.4Ministry of Finance Japan. About JGBs
Coupon rates on fixed-rate JGBs are set at auction and stay constant until maturity. The floating 10-year retail bond is the exception, adjusting semi-annually.
Opening the Account
Every purchase runs through a transfer account at a participating financial institution. You need valid photo identification (a My Number Card or driver’s license is standard) and a Japanese bank account linked for settlement and coupon payments. The name on the securities account and the linked bank account must match exactly; any mismatch will delay or block the application.
Since January 1, 2026, anyone opening a new financial account at a reporting institution in Japan must also submit a self-certification form covering name, address, date of birth, jurisdiction of tax residence, and a foreign tax identification number if the account holder is a tax resident of another country.5National Tax Agency. To Persons Who Open Financial Accounts The institution checks this information against your identity documents and completes anti-money laundering review before activating the account.
Placing the Order
New tranches of JGBs for Individuals go on sale monthly through a subscription window. During that window you place a purchase order through your institution’s online portal or at a branch counter, specifying the yen amount you want to invest.4Ministry of Finance Japan. About JGBs Once the order is placed and funds transfer from your linked bank, the institution issues a contract confirmation document listing maturity date, coupon rate, payment dates, and face value. On the official issuance date the bond is recorded in your transfer account. That electronic entry is your ownership record.
Institutional JGBs work similarly at the primary-market level, but most retail activity in those bonds happens on the secondary market, where prices move with prevailing interest rates.
Getting Out Before Maturity
This is where the two product lines diverge, and it matters more than most first-time buyers expect.
Institutional JGBs can be sold on the secondary market at any time. The 10-year benchmark is heavily traded and generally liquid, but longer maturities and inflation-indexed bonds can be harder to exit at favorable prices. Your sale price depends on where interest rates sit relative to your bond’s coupon, so you may receive more or less than you originally paid.4Ministry of Finance Japan. About JGBs
JGBs for Individuals cannot be sold on the open market at all. After an initial holding period (generally one year from issuance), you can request an early redemption through the institution that holds the bond. The government buys it back at face value minus a portion of recent interest payments as a penalty. The exact deduction depends on product type and how long you held the bond, and the specifics are laid out in the offering documents you should review before you buy. The upside: you will never lose principal on a retail JGB through early redemption. The trade-off: you give back some of the interest you earned.
Taxes on Interest and Gains
For resident individuals, interest, capital gains, and redemption profits on coupon-bearing JGBs are subject to a separate self-assessment tax of 20.315%. That breaks down into 15% national income tax, a 0.315% special reconstruction surtax, and 5% local tax. Tax on interest is withheld at the time each coupon is paid.6Ministry of Finance Japan. Overview of Taxation on JGBs (Resident Individuals and Domestic Corporations) Gains and losses from JGBs can be offset against gains and losses from listed stocks and similar financial products under the same self-assessment regime.
Interest paid on JGBs to non-resident individuals or foreign corporations is subject to withholding tax at 15.315%.7National Tax Agency. Withholding Tax Guide (2026) A tax treaty between Japan and your home country may reduce or eliminate this withholding, and in some cases interest on certain transferred government bonds may qualify for an outright exemption. Check the applicable treaty rate before you invest.
If You Are Not a Resident of Japan
Non-residents can open a Japanese securities account in principle, but the practical experience is often difficult. The same self-certification form applies, requiring jurisdiction of tax residence and a foreign tax identification number, and the institution must verify that information against identity documents.5National Tax Agency. To Persons Who Open Financial Accounts Many Japanese financial institutions are reluctant to open accounts for people without a Japanese address, which pushes most foreign JGB investment through overseas brokerages or institutional custodians rather than direct retail purchases.
Currency risk is the other consideration. JGBs are denominated and settled entirely in yen. A bond paying 2% in yen can deliver a negative return in dollar terms if the yen weakens during your holding period, and the opposite when the yen strengthens. Hedging through forwards or options is possible but the cost typically eats into the yield, especially when the interest rate gap between Japan and your home country is wide.
Inheritance is a separate complication. If a non-resident JGB holder dies, heirs outside Japan generally cannot open new Japanese bank accounts to receive proceeds, so accounts usually have to be closed and funds remitted abroad. Japanese financial institutions and legal affairs bureaus are not uniformly experienced with cross-border inheritance procedures, and retaining a legal professional familiar with the process is advisable.
Why Yields Look Different Now
The Bank of Japan (BOJ) owned roughly 54% of all outstanding JGBs (excluding Treasury Bills) at the end of 2024, the product of years of quantitative easing. In July 2024 the BOJ announced a plan to gradually cut its monthly JGB purchases from about 5.7 trillion yen to 3 trillion yen per month by the first quarter of 2026, reducing purchases by 400 billion yen per quarter. Yields have moved as the BOJ has stepped back: the 10-year JGB yield reached approximately 2.48% in early May 2026, a level unthinkable a few years earlier when 10-year yields sat near zero.
The practical takeaway for a new buyer is twofold. Higher yields mean better income if you plan to hold to maturity. But rising yields also mean existing bonds lose market value if sold before maturity, so if there is any chance you will want to exit early through the secondary market, you carry price risk that barely existed during the BOJ’s peak buying years. Retail JGBs sidestep this because they redeem at face value, but at the cost of the interest penalty described above.