Japanese vs foreign bonds, government vs corporate, duration and credit, currency hedging, and bond funds vs individual JGBs.
Bond funds hold many bonds for income and relative stability; key choices are Japanese vs foreign, government vs corporate, duration, credit quality, and — for foreign bonds — whether to hedge currency, which often dominates their yen returns.
Bond funds pool many bonds and pay income. The main dimensions are geography (Japanese vs foreign), issuer type (government vs corporate), duration, and credit quality. Duration measures how much the price moves when interest rates change: a longer-duration fund is more sensitive, gaining more when rates fall and losing more when they rise. Credit quality ranges from safe government bonds to higher-yielding corporate bonds that carry default risk.
Bonds are held mainly for income and to cushion equity volatility, but they still carry interest-rate, credit, and (for foreign bonds) currency risk. A bond fund is not a cash substitute — its price fluctuates.
For foreign bond funds, currency matters more than for equities. Because bond returns are modest, a large yen exchange-rate move can dominate the result. If your reason for holding foreign bonds is yen stability, an unhedged version can defeat the purpose, so a currency-hedged version is often more consistent with the goal — at a hedging cost tied to interest-rate differentials.
A diversified bond fund differs from a single retail JGB: the JGB has government-backed principal and no price volatility if held to maturity, but a fund spreads across many issuers and maturities, fluctuates in price, and may include longer-duration or foreign bonds. Use a fund for diversified bond exposure and JGBs for government-safe, hold-to-maturity stability.
Brokerage (NISA/iDeCo) · Rakuten Securities
A leading low-cost brokerage for NISA and index-fund investing, integrated with Rakuten points and Rakuten Bank.
Fees: Many domestic funds and trades are low- or no-commission — verify current fee schedule.
Brokerage (NISA/iDeCo) · SBI Securities
Japan’s largest online brokerage by accounts, with a very broad low-cost fund lineup and full NISA/iDeCo support.
Fees: Many trades and funds are low- or no-commission — verify current fee schedule.
Brokerage (NISA/iDeCo) · Monex
An established online brokerage often chosen for US-stock access and research tools, with NISA and iDeCo support.
Fees: Commissions vary by product; some funds/trades are low-cost — verify current schedule.
This is education, not a recommendation. Most beginners research low-cost, broadly diversified index funds — for example all-country (全世界株式) or S&P 500 trackers — rather than picking individual stocks, because low fees and diversification are within your control while returns are not. Understand that values fall as well as rise, match the risk to your time horizon, and never invest money you may need soon.