HALISTER1: HSBC Cuts 10-Year JGB Year-End Forecast to 0.05% on Haven Demand

HSBC Cuts 10-Year JGB Year-End Forecast to 0.05% on Haven Demand

(Bloomberg) -- HSBC has cut its year-end forecast for 10-year Japanese government bond yield to 0.05% from a previous target of 0.1%, according to a note from the bank.
  • Safe-haven demand will be a dominant factor in near term amid heightened geopolitical tensions, write analysts including Andre de Silva, head of global EM rates research in HK
  • 10-year yields will remain anchored around zero even if BOJ further reduces the amount of bond purchases
  • Investors’ search for duration is unlikely to fade anytime soon given recent drop in JGB yields
    • Latest auction of super-long JGBs already revealed such appetite
  • NOTE: 10-year JGB yield currently at 0.005%
    • BOJ kept purchases of 5-10 year sector unchanged at 410b yen at its regular bond buying operation earlier Wednesday
To contact the reporter on this story: Patricia Lui in Singapore at plui4@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Nicholas Reynolds

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Source: BFW (Bloomberg First Word)

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Andre de Silva (HSBC Holdings PLC)

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