Japan Banks' Long-Bond Binge Risks Loss If Abenomics Wins or Not
- They bought a net 197.4 bln yen of super-long JGBs in January
- Potential valuation-loss would be big on yield gain: MUFJ MS
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Japanese banks are loading up on longer maturity bonds in their hunt for yield, a move that could come back to haunt them whether Abenomics succeeds or fails.
The nation’s commercial lenders bought a net 197.4 billion yen ($1.7 billion) of super-long Japanese government bonds in January, surging from a net 7 billion yen purchase the month before, Japan Securities Dealers Association data showed. Their net buying of all interest-bearing debt was 628.3 billion yen, the most since August, suggesting banks prefer to park stimulus cash in fixed-income markets rather than extend credit.