Samurai Yields Drop to 2-Year Low Versus Europe: Japan Credit

Japanese debt yields dropped to their lowest in almost two years relative to the euro-zone, raising speculation European banks will sell more Samurai bonds after issuing record amounts of the securities in 2010.

Debt sold in Japan by overseas issuers yield an average 91 basis points more than government debt, while euro-denominated financial company notes yield 231 more than benchmark German securities, according to indexes compiled by Nomura Securities Co. and Bank of America Merrill Lynch. It costs 313 basis points less in yield for lenders to sell debt in Japan than in Europe, the biggest difference since the gap reached 319 in March 2009.