HALISTER1: Japanese Investors Sold Foreign Debt on BOJ, Fed Outlook: BofAML

Japanese Investors Sold Foreign Debt on BOJ, Fed Outlook: BofAML

(Bloomberg) -- Japanese investors sold overseas bonds due to uncertain outlook for BOJ’s monetary policy and rising expectations for Sept. Fed rate hike, says Shuichi Ohsaki, chief Japan rate strategist at Bank of America Merrill Lynch.
  • Steepening of yield curves in Japan and the U.S. and upcoming end-1H of Japan’s fiscal year may have also caused some selling, says Tokyo-based Ohsaki by phone
  • At this time, domestic investors don’t seem to be buying super-long JGBs: Ohsaki
  • Focus is on what measures BOJ would take on its JGB purchase program, what is central bank’s intention toward steepening of yield curve and whether BOJ’s policies are sustainable as key factors for determining if Japanese investors resume JGB investments in 2H of this fiscal year
  • NOTE: Japanese investors sold a net 1.06t yen ($10.3b) of overseas equities and bonds in week ended Sept. 9 after offloading 1.25t yen worth of securities a week earlier; that’s the first back-to-back selling since April
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Shuichi Ohsaki (Merrill Lynch Japan Securities Co Ltd)

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