Ultra-Low Japan Yields Go Global as Hedged Yen Buying U.S. Bonds
- Japanese investors bought record amount of Treasuries in March
- JPMorgan sees ‘synchronization’ of Japan bonds, Treasuries
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Japan is taking its ultra-low bond yields global as yen funds flock to U.S. Treasuries at the fastest pace ever.
Japanese investors were net buyers of long-term U.S. sovereign debt in April, after scooping up an unprecedented 5 trillion yen ($47 billion) in March, Ministry of Finance data show. That helped drive the cost to hedge their currency risks to the highest since the global financial crisis. Tohru Sasaki, JPMorgan Chase & Co.’s head of Japan markets research, sees “synchronization” of Japanese government bonds and Treasuries, as the Asian nation’s investors snap up whichever security offers the most yield after hedging.