Reading the numbers: how the rates on the three retail government bonds are setHow the interest on retail government bonds is decided
On November 6 the Ministry of Finance published the subscription amounts for government bonds for individuals in October 2026: JPY 361 billion for the floating-rate 10-year, JPY 1,315.1 billion for the fixed-rate 5-year and JPY 349.5 billion for the fixed-rate 3-year, totalling JPY 2,025.6 billion. The rate on all three is worked out from a base rate: the floating 10-year multiplies it by 0.66, the fixed 5-year subtracts 0.05 percentage points and the fixed 3-year subtracts 0.03, with a floor of 0.05 percent a year.
Key points
- The formula differs by type: the floating 10-year is the base rate multiplied by 0.66, the fixed 5-year is the base rate minus 0.05 percentage points, and the fixed 3-year is the base rate minus 0.03
- All three have a minimum rate of 0.05 percent a year. Even if the formula gives less, 0.05 percent is the floor
- The interest rate information for November 5 shows 1.953 percent at three years, 2.210 percent at five years and 2.806 percent at ten years. Applying the formulas gives about 1.85 percent for the floating 10-year, 2.16 percent for the fixed 5-year and about 1.92 percent for the fixed 3-year (the base rate that actually applies is set for each offering, so these are only indications)
- Subscriptions in October 2026 were JPY 361 billion for the floating 10-year (199th issue), JPY 1,315.1 billion for the fixed 5-year (187th issue) and JPY 349.5 billion for the fixed 3-year (197th issue). The fixed 5-year made up about 60 percent of the JPY 2,025.6 billion total, and the issue date is set for November 16, 2026
- The minimum purchase is JPY 10,000, in units of JPY 10,000. The rate on the floating 10-year is reset each year, while the fixed 5-year and fixed 3-year keep the rate set at issue until maturity. Early redemption is possible one year after issue, with a deduction of the last two interest payments multiplied by 0.79685
What to do in practice
- Look at the published rates by maturity and work out the indicative rate for each of the three types yourself
- Sort out the difference between fixed and floating by the length to maturity and whether the rate is reset, and use the same view when looking at your own borrowing terms
Government bonds for individuals can be bought from JPY 10,000. You do not choose the interest rate: it is worked out from the government bond rate at the time, called the base rate. The 10-year floating type is the base rate multiplied by 0.66, the 5-year fixed type subtracts 0.05 percentage points, and the 3-year fixed type subtracts 0.03. However low the result, the rate never falls below 0.05 percent a year. In October, people subscribed for JPY 2,025.6 billion in total.
- Ten-year government bond rate on November 5
- 2.806 percent
- Multiplier
- 0.66
- Indicative rate for the floating 10-year
- about 1.85 percent
Points
- You can buy from JPY 10,000. The interest rate is worked out from the government bond rate at the time
- The 10-year floating type multiplies by 0.66. The 5-year and 3-year fixed types subtract a little
- Whatever happens, the interest never falls below 0.05 percent a year
What the words mean
- base rate
- The government bond rate at the time, used as the basis for working out the interest rate
- floating
- A way of setting interest in which the rate is reset at fixed times
- fixed
- A way of setting interest in which the rate at purchase stays the same until maturity
- Ministry of Finance (MOF): Ministry of Finance: Government bonds for individuals (product terms)
- Ministry of Finance (MOF): Ministry of Finance: Subscription amounts for government bonds for individuals (October 2026)
- Ministry of Finance (MOF): Ministry of Finance: Government bond interest rate information (November 5, 2026)
Economic news presents published statistics and outlooks. It is not investment solicitation or trading advice. Figures are as of publication and may be revised.
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.