HALISTER1: Deutsche Recommends Buying JGBs on Dips at 20-Year Auction

Deutsche Recommends Buying JGBs on Dips at 20-Year Auction

(Bloomberg) -- There’s a risk that JGB yields will drop again as all market catalysts will be out after Sept. 21 decisions by BOJ and Fed, so investors should buy JGBs on dips at 20-year auction, according to Deutsche Securities.
  • With auction approaching at highest level in fiscal 2016, Deutsche expects some buying from investors that are looking to buy 20-year JGBs at a yield of about 0.5% this fiscal year, chief strategist Makoto Yamashita writes in note today
  • It’s difficult to anticipate how far JGB yield curve will steepen even if BOJ makes bond purchases more flexible: Yamashita; says concerns over U.S. rate hike in Sept. persist, and some investors are probably waiting for BOJ and Fed’s decisions before buying
  • While BOJ desires a degree of steepening, it has said that increased issuance of corporate bonds in super-long sector is one effect of its negative rate policy; BOJ is unlikely to be looking for uninterrupted steepening
  • 20-year yield up 0.5 bp at 0.460% ahead of 20-year auction tomorrow
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Makoto Yamashita (Deutsche Bank AG)

To de-activate this alert, click here

UUID: 7947283