Usually by this time of the year, we should start feeling some kind of festive vibes, when corporates, bankers and investors begin readying themselves for year-end travels or family gatherings, and markets slowly get into a sleep mode.

Not the case with Japan this year, which has kept printing new deals – primarily equity-linked bonds and follow-ons while the initial public offering market has remained largely muted this year. And it’s not just a lot of deals, it is a lot of huge deals coming out of the world’s third largest economy, as if it is on steroids.

Secondary public offerings have had a stellar year in Japan, way outperforming the IPO market though this is not unusual.

With its major equity indices flirting with levels last touched in early 1990 – when its equity and real estate bubbles burst – opportunities abound for companies to raise fresh capital for expansion or debt refinancing, and majority shareholders to take profits.

“Japan has been a major (profit and loss) contributor this year,” said one Hong Kong-based equity fund manager.

Shareholders and corporates have raised USD 23bn from share placements so far this year, three times last year’s USD 7.5bn, based on preliminary Dealogic data.

Japan not only contributed six of the region’s 10 largest follow-on transactions this year by deal count, but also accounted for nearly 80% of the 10’s total deal volume (USD).

The three largest follow-ons are all Japanese. Japan Post Holdings raised USD 8.98bn by cutting its stake in Japan Post Bank in March, followed by Rakuten Group's USD 2.12bn new-share offer in May, and INCJ's sale of USD 1.84bn worth of shares in Renesas Electronics in November.

Yet, all eyes are on a much larger deal ahead - three major shareholders including Toyota Motor Corp [TYO:7203] are offloading a jumbo USD 4.7bn chunk of shares in Denso Corp [TYO:6902], an Aichi, Japan-based auto parts supplier. The deal will be priced later this month.

At USD 4.7bn, this would be the largest share placement for the region in nine years, since Ping An Insurance (Group) Co of China [HKG: 2318] raised USD 4.75bn from a new share issuance in December 2014.

While Japanese deals typically get priced at the tightest end, some multi-strategy funds seek to hedge their exposure on the day of pricing to maximize possible returns.

In the equity-linked bond market, Japan printed USD 3.6bn worth of papers, eight times last year’s negligible USD 435m.

What’s unusual this year is an increase in the involvement of bankers based in Hong Kong in Japanese equity-linked bond sales. In the past, such deals were typically managed out of Tokyo or London.

"Japan has been active...international banks are more involved in Japan deals," said a Hong Kong-based banker with one of the Wall Street bulge banks. "I have been working on Japan for over two years with a bit of ‘thinking-ahead’” on belief it may take quite a while for China to regain its clout in the dealmaking space, he added.

Within Asia Pacific, Japan ranked No.2 by USD volume in the convertible bond market, behind South Korea's USD 4.2bn.

But by deal count, Japan would be the region's largest issuer, two times closest rival to China's eight offerings.

And the 16 deals from Japan are well spread throughout the year, while South Korea last printed a deal in mid-July.

South Korea's Financial Services Commission has imposed a ban on short-selling of stocks in the Kospi 200 Index and the Kosdaq 150 Index through June 2024, making it difficult to sell Korean papers, said the banker.

Investors and bankers alike expect Japan, perhaps along with India, to remain the major breadwinners for the region's ECM bankers into 2024.

That may not be a bad thing.

But a more balanced market is always more sustainable. That, investors argue, would depend on how much issuers are willing to compromise on valuations, especially when it comes to IPOs.

"As long as a company is fundamentally OK, then every deal has a price...it's a matter of whether the issuer gets the price right, which is unfortunately often the opposite this year," one said.