Japan’s Second-Biggest Bond Fund Doesn’t See Value in Yen Debt
- ‘Very hard to put more money into JGBs now,’ MUFJ Kokusai says
- Yields on 10- and 20-year bonds dropped to records Monday
Pedestrians are reflected in an electronic stock board outside a securities firm in Tokyo, Japan, on Thursday, Jan. 7, 2016. Japanese stocks fell for a fourth day, extending a global slide that's seen shares post their worst start to a year since 2000, after China again cut the reference rate for the yuan and trading in the world's second-biggest equity market was halted.
Photographer: Tomohiro Ohsumi/BloombergFor Japanese fund managers trying to squeeze yield from their nation’s sovereign debt market, 20-year bonds have become a bastion. Now one gauge shows those too are becoming prohibitively expensive.
Tatsuya Higuchi, who manages the flagship sovereign debt fund at Mitsubishi UFJ Kokusai Asset Management Co., said he looks at the Japanese government bond market’s implied yield for the 10-year benchmark in 10 years’ time and then compares it to long-term averages to decide whether it’s worth buying the longer-dated notes.