Latest news with #JGBs
Yahoo
an hour ago
- Business
- Yahoo
Iyogin Holdings Eyes Return to JGBs After Nvidia, Treasury Gains
Iyogin Holdings plans to resume buying Japanese government bonds once 10-year yields rise to around 1.7%1.8%, CEO Kenji Miyoshi said, citing expectations that the Bank of Japan's policy rate will peak at 1.5%. Less than 10% of the bank's 1.8 trillion ($12 billion) portfolio is currently in JGBs, but that could rise to 50% if yields become attractive. Warning! GuruFocus has detected 4 Warning Signs with NVDA. The regional lender posted record profits for a third year, fueled by gains from unhedged foreign bonds and a tenfold return on its stake in Nvidia (NVDA, Financials), acquired five years ago. Miyoshi said the bank sold part of the position to lock in gains. Iyogin is ready to trade JGBs electronicallyrare in Japan's bond marketand is open to hiring outside talent to boost risk awareness. While not pursuing mergers, Miyoshi said the bank aims to play a central role if consolidation reaches its home region. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Business
- Yahoo
Iyogin Holdings Eyes Return to JGBs After Nvidia, Treasury Gains
Iyogin Holdings plans to resume buying Japanese government bonds once 10-year yields rise to around 1.7%1.8%, CEO Kenji Miyoshi said, citing expectations that the Bank of Japan's policy rate will peak at 1.5%. Less than 10% of the bank's 1.8 trillion ($12 billion) portfolio is currently in JGBs, but that could rise to 50% if yields become attractive. Warning! GuruFocus has detected 4 Warning Signs with NVDA. The regional lender posted record profits for a third year, fueled by gains from unhedged foreign bonds and a tenfold return on its stake in Nvidia (NVDA, Financials), acquired five years ago. Miyoshi said the bank sold part of the position to lock in gains. Iyogin is ready to trade JGBs electronicallyrare in Japan's bond marketand is open to hiring outside talent to boost risk awareness. While not pursuing mergers, Miyoshi said the bank aims to play a central role if consolidation reaches its home region. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
NHK
3 hours ago
- Business
- NHK
Japan to review JGB issuance plan amid super-long bond slump
Japan's Finance Ministry has called for reducing the issuance of super-long government bonds, amid slumping demand for those with maturities of over 10 years. It's rare for the ministry to review the bond issuance plan midway in a fiscal year. The ministry presented the proposal at a closed-door meeting with financial institutions that take part in auctions on Friday. The plan calls for trimming issuance of bonds, including maturities of 20 to 40 years, starting July. That means a reduction of 3.6 trillion yen, or around 24.7 billion dollars. The total value of bond issuance for this fiscal year would be kept unchanged at 176 trillion yen, or about 1.2 trillion dollars. The ministry would replace the bonds with short-term ones and more bonds for individual investors. The ministry makes an issuance plan for government bonds for every fiscal year and conducts auctions as planned. But the auction held in May for 20-year bonds saw the weakest demand since 2012. The ministry said it will work to ensure stable sales of JGBs by revising its issuance plan.
The Star
12 hours ago
- Business
- The Star
Caution by BoJ likely to keep Japanese capital overseas
Japan still has plenty of financial muscle with a net US$3.5 trillion in overseas stocks and bonds. — Reuters The Bank of Japan (BoJ) is taking a more cautious approach to reducing its balance sheet, meaning Japanese capital invested overseas is less likely to be coming home anytime soon. In the face of heightened economic uncertainty and recent volatility at the long end of the Japanese Government Bond (JGB) curve, the BoJ announced on Tuesday that it will halve the rate of its balance sheet rundown in fiscal year 2026 to 200 billion yen or about US$1.4bil a quarter. The central bank began gradually shrinking its bloated balance sheet 18 months ago and last August began an even more gradual interest rate-raising cycle, representing a historic shift after years of maintaining ultra-low and even negative nominal rates. All else being equal, this modest tightening would be expected to narrow the yield gap between Japanese and foreign bonds, making JGBs more attractive to domestic and foreign investors while also strengthening the yen. So why hasn't the Japanese capital been coming home? In part, because Japan's real interest rates and bond yields remain deeply negative, and the latest BoJ move suggests this is likely to remain the case for the foreseeable future. The prospect of Japanese real returns staying deeply negative is enhanced by current inflation dynamics. Price pressures Inflation in Japan is the highest in two years by some measures and may prove sticky if Middle East tensions continue to put upward pressure on oil prices. Japan imports around 90% of its energy and almost all of its oil. Japan's yield curve could also potentially flatten from its recent historically steep levels if the BoJ's decision caps or lowers long-end yields. And the curve will flatten further if the BoJ continues to 'normalise' interest rates – something BoJ governor Kazuo Ueda insists is still on the table, although markets think the central bank is on hold until next year. Either way, a flatter yield curve won't be particularly appealing to Japanese investors who may be considering pulling money out of the United States or European markets. And there is a lot of money to repatriate, meaning even marginal shifts in Japanese investors' positioning could be meaningful. Assets abroad While Japan is no longer the world's largest creditor nation, having recently lost the crown to Germany after holding it for more than three decades, it still has plenty of financial muscle with a net US$3.5 trillion in overseas stocks and bonds, the highest total ever. Analysts at Deutsche Bank estimate that Japanese life insurers and pension funds hold more than US$2 trillion in foreign assets, around 30% of their total assets. What would prompt Japanese investors to repatriate? In a deep dive on the topic last month, JP Morgan analysts said several stars would have to align, namely a sustainable rise in long-term Japanese interest rates, an improvement in the country's public finances, and steady yen appreciation against the US dollar. That's a tall order. But if this were to materialise, and banks and other depository institutions reverted to pre-'Abenomics' asset allocation ratios of 82% domestic bonds and 13% foreign securities, repatriation flows from these institutions alone could amount to as much as 70 trillion yen. That's just under US$500bil at current exchange rates. That's not JP Morgan's base case though, certainly not in the near term. But over the long term, they think some reversal of the flow of capital from JGBs into US bonds over the last decade or more is 'plausible'. The BoJ's decision on Tuesday probably makes the prospect of any significant capital shift less plausible, though, at least for now. — Reuters Jamie McGeever is a columnist for Reuters. The views expressed here are the writer's own.
Business Times
a day ago
- Business
- Business Times
Japan to cut super-long bond sales by 10% to calm markets
[TOKYO] Japan's government plans to cut sales of super-long bonds by about 10 per cent from its original plan in a rare revision to its bond programme for the current fiscal year, trimming overall bond issuance as a result, a draft document seen by Reuters showed. The move aims to soothe market oversupply concerns, after weak demand at recent auctions and a surge in super-long yields to record highs last month rattled the bond market. The step also follows the Bank of Japan's decision this week to slow its tapering of bond purchase from next fiscal year, signalling caution as it removes remnants of its massive, decade-long monetary stimulus. The revised issuance plan will be presented to primary dealers for discussion at a meeting on Friday. Additionally, there are also proposals to buy back some previously issued super-long JGBs with low interest rates to better balance supply and demand. The planned reduction in 20-, 30- and 40-year super-long bond sales would be partly offset by increased issuance of shorter-term notes, as well as bonds specifically designed for households. As a result, the total Japanese government bond (JGB) scheduled sales for the year through next March are set to fall by 500 billion yen (S$4.42 billion) to 171.8 trillion yen, according to the draft of the revised bond programme. Issuing a larger amount of shorter-term bonds, however, would require a careful balancing act as the government would need to roll over debt more frequently and make its finances more vulnerable to bond market swings. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Specifically, the revised plan calls for reducing 20-year JGB sales by 900 billion yen to 11.1 trillion yen, 30-year JGBs by 900 billion yen to 8.7 trillion yen and 40-year JGBs by 500 billion yen to 2.5 trillion yen. This means starting next month, sales of each of these tenors will be cut by 100 billion yen at every auction. Instead, the government will boost sales of two-year debt, one-year and six-month treasury discount bills by 600 billion yen each. At every auction starting October, sales of two-year debt will be raised by 100 billion yen to 2.7 trillion yen. The government will also increase issuance of principal-guaranteed JGBs for households by 500 billion yen. Debt markets rallied on the news with an auction of five-year JGBs seeing the highest demand in almost two years. Bonds extended gains in the afternoon session on Thursday, led by shorter-dated securities. The five-year yield fell 4 basis points to 0.965 per cent. Yields move inversely to bond prices. The longest dated bonds fell, with the 30-year yield rising 1.5 basis points to 2.945 per cent. The original plan had called for cuts in 30- and 40-year bond sales to reflect shrinking demand from life insurers who mostly completed purchases of longer-dated bonds to comply with new solvency regulations. But as the worsening finances of advanced economies drew more market scrutiny, super-long JGBs became a target of a global bond selloff last month. 'It was a (positive) surprise to the market that the government is not increasing sales of five-year JGBs in the revision,' said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management. 'But heavier reliance on shorter-term bonds is a sign of Japan's falling credit quality. Essentially, it's not the ministry of finance's responsibility but lawmakers' to carry out debt management with a sense of crisis.' REUTERS
