Convertible Bond Deals Surge in Japan on Stock Rally, BOJ Hike

Japanese companies are tapping convertible bonds as a soaring stock market makes the instruments a relatively cheap funding source after the nation’s central bank hiked interest rates for the first time in 17 years.

Issuers in Japan raised ¥925 billion ($6.1 billion) in equity-linked bonds during the fiscal year ended March, the most since 2015, according to data compiled by Bloomberg. The number of such bond deals increased to 23 during the period, from four a year earlier.

“Convertible bonds are an option to lower financing costs in case the rate increase affects corporate debt issuance,” said Hayato Takei, ...