HALISTER1: Japanese Likely Sold Foreign Debt on Yen’s Sharp Rise: BofAML

Japanese Likely Sold Foreign Debt on Yen’s Sharp Rise: BofAML

(Bloomberg) -- Japanese investors likely either cut losses or took profits on their overseas bond holdings on the back of yen’s sharp gains, says Shuichi Ohsaki at Bank of America Merrill Lynch, referring to MOF data released earlier today.
  • Sharp drop in USD/JPY basis swaps may have also contributed to some unwinding of those holdings, says Ohsaki, chief Japan rates strategist at BofAML, in an interview; NOTE: Japanese investors were net sellers of 1318.3b yen ($11.6b) in overseas long-term bonds and notes during week ended Feb. 12, most since June 12, 2015: data from Ministry of Finance
  • This data also suggest that foreign investors’ purchases of JGBs probably led to declines in 2-, 5- and 10-year yields to record lows last week: Ohsaki; NOTE: Foreign investors bought 1146.5b yen in Japanese bonds last week, most since Aug. 14, 2015
  • Sees focus on results of today’s 5-year JGB auction for whether overseas investors show demand despite yield of -0.150% in secondary market
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Shuichi Ohsaki (Merrill Lynch Japan Securities Co Ltd)

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