Kuroda Put Prompts Japan Banks to Shift to Longer Bonds

Japan’s largest lenders are shifting their debt portfolios to longer-maturity sovereign notes, seeking to squeeze out higher returns and betting that central bank buying will shield them from potential losses.

So-called city banks including the Bank of Tokyo-Mitsubishi UFJ Ltd. and Mizuho Bank Ltd. boosted holdings of Japanese government bonds maturing in 10 years for a record fifth-straight month in September, while selling notes due in two to five years, data released yesterday from the Japan Securities Dealers Association showed. Five-year JGBs yielded 0.205 percent today, while the 10-year rate was 0.615 percent, versus 2.6 percent for U.S. Treasuries due in 2023.