Halister News

(Bloomberg) -- A decline in short-dated USD/JPY basis swaps has made it more enticing for dollar-holding investors to buy Japanese debt, says SBI Securities chief bond strategist Eiji Dohke.

• U.S. debt ceiling uncertainty also discouraged investors from holding short-dated U.S. securities as they divert their funds into Japanese notes as an alternative
• The three-month extension on U.S. debt ceiling is likely to reduce some demand for Japanese securities
• NOTE: USD/JPY one-year basis swap dropped to -54.75bps on Aug. 30, lowest in eight months, from -44.25bps on July 31
  • Non-residents’ purchases of Japanese bonds climbed to a net $12.5b last week, the third-highest level on record, according to finance ministry data released Thursday

To contact the reporter on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui