HALISTER1: Japanese Sold Foreign Bonds Last Week due to Profit-Taking: UBS

Japanese Sold Foreign Bonds Last Week due to Profit-Taking: UBS

(Bloomberg) -- Japanese investors turned net sellers of overseas debt last week for first time since Feb. 12 because of profit-taking for new fiscal year that started April 1, says Yusuke Ikawa, salesperson at UBS Knowledge Network.
  • “It’s a payback for their huge purchases” made following BOJ’s introduction of negative interest rates, says Tokyo- based Ikawa in an interview; NOTE: Japanese sell most overseas debt in nine months last week
  • Once Japanese investors finish their profit-taking, however, they’re likely to resume buying foreign bonds: Ikawa
  • For JGBs, super-long sector is supported by buying interest from market participants seeking positive yields: Ikawa: says some are taking a cautious stance ahead of next week’s 30-year auction, which seen as big supply/demand event
  • 10-year yield up 0.5 bp to -0.060%, 20-year yield slips 1.5 bps to 0.350%, 30-year yield drops 3.5 bps to 0.420% and 40- year yield declines 4 bps to record low of 0.425%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Yusuke Ikawa (UBS Asset Management Japan Ltd)

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