Halister News

(Bloomberg) -- Sompo Japan Nipponkoa Asset Management is “overweight” on super-long-tenor Japanese govt bonds, a strategy aimed at beating returns indicated by the benchmark index it follows.

• “We have been mainly buying 20-year JGBs that offer better carry and rolldown across the curve,” Shinji Hiramatsu, general manager of the fixed-income investment department in Tokyo, said in July 14 interview. “We don’t buy them at negative yields. We also don’t like to keep extending duration because the bond markets seem to be facing a bubble.”
• BOJ’s introduction of negative interest rate on Jan. 29 dragged yields of govt securities with maturities up to 15 years to sub-zero; benchmark 20-year rate rebounded to 0.1% this morning after touching -0.005% on July 6
• Sompo Japan, which oversees about $17b of assets as of end- March, also likes a position that benefits from the shape of yield curve
  • This may include going long on 10-year securities when they are relatively cheap and offer better carry against the short- and medium-term notes, Hiramatsu said