23/12/2025

BIZ & FINANCE TUESDAY | DEC 23, 2025

16

Japan eyes household savings for fresh bond demand

Beijing to scrub small overdue debts from credit records

BANGKOK: Car production in Thailand in November rose 11.06% from a year earlier to reach 130,222 units, the Federation of Thai Industries said yesterday. The increase followed a year-on-year rise of 14.17% in October. Local sales in November rose 20.65% year-on-year, folloing an increase of almost 25% rise in the previous month. Thailand is Southeast Asia’s biggest auto production centre and an export base for some of the world’s top carmakers, including Toyota and Honda. “Seeing the figures makes me feel much more relieved,” said Surapong Paisitpatanapong from the Federation of Thai Industries’ auto club. “Over the 11 months, the segment that declined the most were passenger internal combustion engine vehicles, because production of some export models was discontinued,”he said. Thailand’s auto exports in November declined 12.2% on an annual basis after dipping 1.5% in October. “Looking at total production over the 11 months, it should reach the target of 1.45 million units, so that target is likely to be met,”Surapong said. – Reuters Thai November car output rises 11% from year earlier Chinese leaders have pledged fresh policy measures – including fiscal stimulus and potential cuts to interest rates and banks’ reserve requirement ratios – to underpin growth next year. – Reuters BEIJING: China’s central bank yesterday unveiled a one-off credit repair scheme to allow overdue personal debts of up to 10,000 yuan (RM5,793) incurred since 2020 to be removed from credit records once fully repaid, as Beijing moves to revive faltering household loan demand. The announcement follows data showing new bank lending fell short of expectations in November, weighed down by shrinking household loans, and as economic momentum weakened, with retail sales hitting their lowest level since the end of the country’s strict zero-Covid policies. The central bank said overdue personal credit entries involving single amounts of no more than 10,000 yuan, incurred between the start of 2020 and the end of 2025, would be removed from the national credit database if borrowers repaid in full by March 31, 2026. The measure aims “to actively address the lingering effects of the Covid-19 pandemic, support individuals whose credit has been impaired but who are actively repaying their debts in efficiently and conveniently rebuilding their credit”, the bank said. The policy would help people improve their credit standing, and also support high-quality economic growth, central bank vice-governor Zou Lan said. It would also help lenders more accurately assess personal credit conditions and improve the quality and efficiency of inclusive finance, he said. Inclusive finance refers to financial services that give low-income groups and small businesses access to banking, credit, insurance and investment products.

Foods, owner of brands like Lurpak and Castello, will pay tariffs between 28.6% to 29.7%. Italy’s Sterilgarda Alimenti SpA will pay the lowest rate of 21.9% while FrieslandCampina Belgium N.V. and FrieslandCampina Nederland B.V. will pay the highest rate of 42.7%. Firms that did not participate in the investigation will pay the highest rate. The decision is likely to be welcomed by Chinese producers who are grappling with a glut of milk and falling prices as declining birth rates and more cost-conscious consumers weigh on demand. China urged producers last year to rein in output and cull older and less productive cows. – Reuters said. Daiwa Asset Management and Amova Asset Management in recent months launched investment trusts focused on 30-year JGBs, targeting domestic retail bond investors for the first time. Amova started thinking about crafting the trust when the 30-year JGB yield hit 3%, said Takuya Kanazawa, a senior vice-president at the firm’s product development department. The yield exceeded 3% for the first time in May and climbed to a fresh record of 3.445% yesterday. “The 3% yield is high enough to beat inflation,” said Kanazawa. “When retail investors think about investing in high-yield debt, it tended to be US or Australian bonds, but those always carry the currency risks. With this fund, they can enjoy higher yields without such risks.” NUCB Business School professor Nana Otsuki, who attended the Finance Ministry’s meeting with investors, said household ownership of JGBs could potentially rise to 5%-6% if the product design is revamped. “Having people hold government bonds would be a meaningful step forward as it could fuel a sense of responsibility among them over what the Takaichi administration calls responsible proactive fiscal policy.” With regard to the investors’ proposals, a senior Finance Ministry official told Reuters the government was preparing to expand the target market for retail JGB sales from January 2027 to include non-profit corporations and unlisted companies. The ministry is also gathering opinions for other potential measures, said the official. The University of Tokyo’s Centre for Applied Capital Markets Research, where Otsuki serves as a fellow, this month urged the government to overhaul retail JGB products to make them more attractive. Proposed steps include making retail JGBs eligible under NISA tax-free investment accounts and revising the coupon-setting formula. – Reuters

scales back its buying and commercial banks face limits to their bond-buying firepower from capital rules that curb interest rate risk. With retail JGBs yielding even less than the type sold to banks, the securities have historically been a tough sell. Domestic households own less than 2% of the ¥1.06 quadrillion in outstanding JGBs, and about half of Japan’s ¥2.20 quadrillion in household financial assets sit in cash or low-yield deposits. “When it comes to finding new investors, we believe there is room for expansion among individuals,” said one participant of the finance ministry’s meeting, according to minutes that did not name the speakers. “As overseas investors cannot be relied upon as stable holders, we should consider product designs that encourage ownership by individual investors, such as increasing offerings like investment trusts for 30-year bonds,” another

o Retail JGB sales jump in 2025 to their highest since 2007

TOKYO: Japan is looking to the country’s US$7 trillion (RM28.5 trillion) household savings hoard to support bond demand with plans to launch new products and incentives, building on hot recent retail sales and filling a void left by diminished central bank buying. Efforts to attract Japanese households are not new – in 2010, the Finance Ministry created a mascot Kokusai-sensei, or Professor JGB, to pitch the securities and later even offered gold coins to buyers of special reconstruction bonds. But where mascots and shiny metals struggled, higher yields have succeeded in drawing in buyers this year. Retail Japanese government bond (JGB) sales jumped 30.5% in 2025 to ¥5.28 trillion (RM137 billion), the highest since 2007.

Enthused by strong momentum, at a meeting with more than a dozen institutional investors in late November, the Finance Ministry faced calls to step up efforts to attract retail buyers, minutes of the meeting released by the ministry showed. Broadening the investor base for JGBs has become critical for market stability as Prime Minister Sanae Takaichi’s reflationary policies fuel concerns about the government’s plans to borrow and spend. Japan’s 10-year government bond yield jumped past the 2% ceiling for the first time in 26 years on Friday after the Bank of Japan (BOJ) raised interest rates to a three-decade high and signalled more policy tightening. Households are seen as a key source of new demand as the BOJ

A man walks past an electronic quotation boards displaying 10-year government bonds (left), an index of long-term interest rates on the Tokyo bond market, and the foreign exchange rate of the US dollar against the Japanese yen (right) in Tokyo yesterday. – AFPPIC China hits EU dairy products with provisional duties

BEIJING: impose provisional duties of up to 42.7% on certain dairy products imported from the European Union after concluding the first phase of an anti-subsidy probe widely seen as retaliation for the bloc’s electric vehicle tariffs. The tariffs will range from 21.9% to 42.7%, although most companies will pay around 30%, and they target products like milk and cheese, including the iconic French blue cheese Roquefort. Duties will start being collected today. The European Commission did not immediately respond to questions about the decision. Yesterday’s decision is provisional China will

LVMH and Remy Cointreau after its brandy probe. China’s Ministry of Commerce said negotiations over the bloc’s EV tariffs resumed this month. However the talks were scheduled to end last week and there has been no announcement since. A senior European diplomat in Beijing said last week that major issues remained between the two sides. China imported US$589 million of dairy products covered by the current investigation in 2024, similar to 2023 values. The Ministry of Commerce said in a statement it had found evidence that EU dairy imports were subsidised and hurting Chinese producers. Roughly 60 firms, including Arla

and could be revised when a final ruling is made. China significantly lowered provisional tariffs on pork in its final decision last week. Trade tensions with the EU erupted in 2023 when the European Commission – which oversees the bloc’s trade policy – launched an anti-subsidy investigation into Chinese-made electric vehicles. Beijing has investigated and imposed tariffs on imports of EU brandy, pork and now dairy, measures seen as retaliatory. However, as it did with pork, Beijing has reduced or limited the impact of its tariffs several times, including partly sparing major cognac producers Pernod Ricard,