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Fixed-term individual Japanese government bonds (JGBs) give you a known nominal rate for three or five years; Japan’s separate 10-year inflation-indexed JGBi adjusts principal in line with consumer prices. They are not two options in the same retail product menu: the Ministry of Finance (MOF) offers individual JGBs as fixed 3-year, fixed 5-year, or floating 10-year products, while JGBi is a marketable security with different purchase and exit mechanics. The better fit depends on whether you prioritize predictable nominal interest and a government redemption option after one year, or CPI-linked principal and the ability to accept market-price risk if you sell early.
At a glance
The individual JGB terms below are compared with the MOF’s marketable 10-year JGBi. Minimums are face-value purchase amounts, not prices inclusive of any provider fees. Checked November 2026; rates change by issue and are not quoted here.
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| Name | Best for | Key spec | Free plan / price | Platforms | Checked |
|---|---|---|---|---|---|
| Individual fixed 3-year JGB | Known nominal rate over a shorter set term | Fixed issue rate; 0.05% annual floor | ¥10,000 minimum, in ¥10,000 units | Banks, securities firms and other financial institutions | November 2026 |
| Individual fixed 5-year JGB | Known nominal rate over a longer set term | Fixed issue rate; 0.05% annual floor | ¥10,000 minimum, in ¥10,000 units | Banks, securities firms and other financial institutions | November 2026 |
| Individual floating 10-year JGB | Retail investors who want a rate that resets | Rate resets every six months; 0.05% annual floor | ¥10,000 minimum, in ¥10,000 units | Banks, securities firms and other financial institutions | November 2026 |
| 10-year inflation-indexed JGBi | Exposure to CPI-linked principal, with market-price risk before maturity | Principal tracks CPI excluding fresh food; 2013-onward issues have a face-value floor at maturity | ¥100,000 face-value unit | Marketable JGB; check an eligible financial institution’s availability and terms | November 2026 |
For current individual-bond issue rates and subscription dates, consult the MOF’s issue and issuance FAQ and the relevant monthly issue conditions before buying. This comparison does not supply a current JGBi yield or a forecast return.
What is the difference between fixed-term individual JGBs and JGBi?
The central difference is what changes over time. A fixed individual JGB pays a nominal rate set when that issue is offered, while JGBi adjusts its principal using an inflation index. The individual product is designed for retail investors and can generally be redeemed through a government buyback after one year, with an interest adjustment. JGBi is a marketable 10-year bond: selling it before maturity means accepting the market price at the time.
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“Fixed-term” here means the MOF’s fixed-rate 3-year and 5-year individual JGBs. The broader individual JGB menu also contains a floating-rate 10-year product, so not every individual JGB has a fixed rate. The MOF describes individual JGBs in its individual JGB product FAQ and explains JGBi separately in its 10-year inflation-indexed bond overview.
That product distinction matters in practice. An investor cannot assume that the retail product’s ¥10,000 purchase minimum, government redemption option, or fixed-rate terms also apply to JGBi. Likewise, JGBi’s inflation adjustment does not apply to the individual fixed 3- and 5-year bonds.
How does JGBi’s inflation adjustment work?
JGBi’s principal is linked to Japan’s consumer price index excluding fresh food. As the index rises or falls, the adjusted principal rises or falls; the coupon rate is preset, but the cash interest amount changes because it is applied to that adjusted principal. That creates an inflation-linked exposure rather than a fixed nominal cash flow.
For example, if the indexation coefficient rises, the bond’s adjusted principal rises and the coupon calculation uses that higher amount. If the coefficient falls, adjusted principal can fall during the bond’s life. This is different from a bond whose coupon alone changes with inflation, and it is also different from a promise that the bond’s market value will always rise when prices do. The MOF’s JGBi explanation describes the index-linked principal and interest mechanics.
For JGBi issued in 2013 or later, the MOF provides a deflation floor at maturity: if the indexation coefficient is below one, principal is redeemed at face value rather than the lower adjusted amount. The MOF states that the principal of those issues “will be guaranteed at maturity (deflation floor).” The timing is essential: this floor applies at maturity, not to a sale made earlier. A market buyer may pay more or less than face value, and a holder selling before maturity may receive less than the purchase price even if the bond has a maturity floor.
The index is also specific: it excludes fresh food. It should not be read as a guarantee that a particular household’s personal cost of living, which depends on its own spending, will be matched exactly. It is an adjustment tied to the specified index, not an individualized inflation hedge.
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How predictable are the interest payments?
The fixed 3- and 5-year individual JGBs provide the clearest nominal-rate certainty: the rate is established for the issue at purchase and remains fixed through maturity. Their rates are calculated from a reference rate, less 0.03 percentage points for the 3-year product and less 0.05 percentage points for the 5-year product; both have a 0.05% annual minimum rate. Interest is paid twice a year.
The individual floating 10-year rate is reset every six months at 0.66 times its reference rate, subject to a 0.05% annual floor. Its future rate and payment amount are therefore not fixed at purchase, although the reset formula is specified. This product is useful to understand as an alternative within the retail menu, but it is neither a fixed-term rate nor the inflation-indexed JGBi.
JGBi has a preset coupon rate, but the payment amount varies as adjusted principal varies. Separately, if a JGBi holder sells in the market before maturity, the sale price can move in response to market conditions. Inflation linkage does not make a market sale price stable.
Do not compare a fixed individual JGB rate with a JGBi coupon as if they were directly equivalent. For a particular JGBi purchase, price and yield matter as well as coupon; inflation expectations and market yields affect its value. A break-even inflation rate would require comparable market data and assumptions. The official information available for this comparison does not establish a current JGBi market yield or a current break-even figure. Individual JGB rates are also issue-specific: use the MOF’s monthly issuance information rather than relying on an old rate quoted elsewhere.
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A fixed individual JGB does not adjust principal or coupon for CPI. Its face-value redemption and fixed nominal rate make the yen amounts more predictable, but inflation can reduce what those yen can buy. That is a consequence of receiving nominal cash flows, not an explicit loss of principal in the bond’s terms.
JGBi ties principal to the specified CPI measure, so it responds to inflation and deflation through its adjusted principal. That can help an investor seeking exposure to changes in consumer prices, but it is not a guarantee of a positive real return or a gain at any chosen sale date. The purchase price, coupon, index movement, holding period, and market price at exit all matter.
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The deflation floor is useful protection against an indexed principal below face value at maturity for eligible issues, but it does not erase the possibility of an early-sale loss. Nor does it guarantee that the investor’s total return, after tax and relative to inflation, will be positive. Distinguish three separate questions: what principal formula applies during the bond’s life, what amount is paid at maturity, and what a market buyer will pay if you sell before maturity.
How much do you need, and where can you buy?
Individual JGBs can be purchased from securities firms, banks, and other financial institutions. The minimum is ¥10,000, with purchases in ¥10,000 units. They are issued monthly, sold at face value, and pay interest twice a year. A first-time buyer needs a JGB account with a financial institution; the provider may charge account-opening or maintenance fees, so check its fee schedule before opening an account. The MOF’s individual JGB guide explains the retail purchase framework.
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The MOF’s general JGB overview lists a ¥100,000 face-value unit for 10-year JGBi and says inflation-indexed bonds are issued quarterly. Because JGBi is marketable rather than one of the retail individual JGB products, confirm with a financial institution whether it offers the relevant security, what minimum order and execution conditions apply, and what fees may be charged. Do not assume that the individual product’s purchase and redemption procedures carry over to JGBi.
Compare the cash amount you can commit with the product minimum and the provider’s charges. A small difference in fees or execution terms may matter, especially when comparing products with different minimums or when the planned holding period is short. Fees and availability are provider-specific; the MOF notes that institutions may set fees for individual JGB accounts.
Can you sell before maturity?
For individual JGBs, government redemption is generally available after one year. The redemption amount includes face value and accrued interest, less an adjustment equal to 0.79685 times the preceding two pre-tax interest payments. Exceptions apply in specified cases, including the holder’s death and certain disaster circumstances. The one-year rule is not the same as unrestricted, cost-free access to cash: the adjustment reduces the amount paid, and the precise redemption process should be confirmed with the institution holding the account.
JGBi’s exit route is a market sale. The MOF warns that the market sale price may be above or below the original purchase price. That means the investor may face a price loss if rates, inflation expectations, or other market conditions change, and the maturity deflation floor does not protect the price received in an earlier sale. The market sale price is not the same thing as the CPI-adjusted principal calculation.
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If there is a meaningful chance you will need the money early, compare the actual exit mechanics before buying. For individual JGBs, consider the one-year waiting period and redemption adjustment. For JGBi, consider the possibility of a market sale below your entry price and the fact that the terms and execution are handled through the market and financial institution. Neither should be treated as a cash account with guaranteed immediate access at the amount originally invested.
How should you compare tax and after-tax returns?
The MOF says interest on JGBs is normally subject to 20.315% withholding, with Maruyū or special Maruyū tax-exempt savings arrangements potentially available to eligible savers. Eligibility and the relevant tax treatment depend on the investor and account circumstances; do not assume that every holder qualifies for an exemption. The MOF’s June 2026 product pamphlet says its comparison was current as of May 2026 and repeats the standard withholding and individual JGB early-redemption terms.
For JGBi, confirm the tax treatment of the specific security and your own situation with an authoritative tax source or qualified adviser. This comparison does not assume a tax rule different from the MOF’s general JGB guidance, and it does not estimate anyone’s after-tax return. A valid comparison should use the issue’s actual coupon or yield and purchase price, expected holding period, tax status, and any applicable fees—not just the stated rate.
When you compare rates, keep the basis consistent. A fixed retail coupon is a nominal rate on the product’s terms; JGBi’s coupon is applied to adjusted principal, and its market purchase price matters. Comparing either before-tax figure directly with the other’s after-tax cash flow can produce a misleading conclusion.
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Choose the product only after matching its term and exit route to the date you may need the money. A three-year or five-year fixed individual JGB has a defined maturity and known nominal rate for that period. JGBi has a 10-year term and market-based early exit. The retail floating 10-year bond resets its rate twice a year, but it remains an individual JGB with the retail redemption framework.
- Consider fixed 3-year individual JGBs if you value a known nominal rate and want a shorter fixed term than the 5-year alternative. Compare the rate on the specific monthly issue with your expected holding period and liquidity needs.
- Consider fixed 5-year individual JGBs if a longer fixed-rate period fits your plan and nominal-rate certainty is more important to you than CPI linkage. The rate remains fixed through maturity, but its purchasing power can be affected by inflation.
- Consider the floating 10-year individual JGB if you want the individual retail product’s terms but prefer a rate that resets every six months. Its formula does not make it inflation-indexed, and future payments are not known in advance.
- Consider JGBi if you specifically want principal linked to CPI excluding fresh food, can accept a 10-year marketable bond, and understand that an early sale may be below your purchase price. Evaluate the market price and yield for the particular issue rather than treating the coupon as a complete return estimate.
These are product-mechanics distinctions, not a recommendation tailored to a person’s finances. The official sources do not establish that one type has historically outperformed the other or supply a current projected after-tax return that makes the choice automatic.
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What should you check before placing an order?
For an individual JGB, verify the exact issue, subscription window, rate, interest-payment dates, maturity, and the provider’s account and fee terms. Since issues are monthly and the fixed rates are set for each issue, a rate found for a previous subscription period may not apply to the next one. Use the MOF’s current issue information and confirm the provider’s order cut-off and processing details directly.
For JGBi, confirm the security’s purchase price, coupon, yield, minimum order, transaction charges, and how a market sale would be executed. Check whether you can hold it to maturity and whether the possibility of a lower sale price is acceptable if circumstances change. The MOF’s general JGB overview distinguishes marketable bonds from individual retail JGBs; provider-specific availability and costs still need confirmation.
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- Choose the exposure. Decide whether you want a fixed nominal coupon, a semiannually resetting retail rate, or CPI-linked principal.
- Read the specific issue terms. Compare the issue’s actual rate or JGBi price and yield; do not substitute a generic or stale figure.
- Check minimums and fees. Confirm the required investment amount, account costs, transaction charges, and any other provider terms.
- Understand the exit route and taxes. Account for the retail redemption adjustment or JGBi market-price risk, and check applicable tax treatment for your circumstances.
The key decision is not simply whether inflation will rise. It is whether the product’s principal and interest mechanics, purchase price, maturity, and early-exit terms suit your intended holding period and ability to accept price movement.
Frequently Asked Questions
Why does JGBi exclude fresh food from its inflation index?
The MOF describes the JGBi index as CPI excluding fresh food, so the bond follows that defined measure rather than every component of headline consumer inflation. A household whose spending is unusually concentrated in food or other categories may experience a different personal inflation rate.
Are Japanese government bonds automatically tax-free for older investors?
No. The MOF says special savings arrangements such as Maruyū may be available to eligible people, but eligibility is not automatic and depends on the investor and account. Check the applicable rules with the financial institution or a qualified tax professional.
Can a provider charge more than the face value when I buy an individual JGB?
Individual JGBs are sold at face value under the MOF product description, but financial institutions may charge account-opening or maintenance fees. Ask for the provider’s fee schedule so the cash cost of opening and holding the account is clear.
Does a JGBi coupon tell me how much I will earn overall?
No. The coupon is only one input: the payment amount reflects adjusted principal, and a marketable JGBi’s return also depends on purchase price, holding period, sale price if sold early, and tax circumstances. The coupon alone is not a complete yield or return calculation.
