Cost of Insuring Japan Corporate Bonds Falls, Default Swaps ShowBloomberg News
The cost of insuring corporate bonds from non-payment in Japan fell, according to credit-default swap traders.
The Markit iTraxx Japan index dropped half a basis point to 68.5 basis points as of 9:39 a.m. in Tokyo, Citigroup Inc. prices show. The measure is poised for a 10.2 basis-point drop this month, after declines of 12 basis points and 6.6 basis points in November and October respectively, according to data provider CMA. A basis point is 0.01 percentage point.
Markets are closed in Australia, Hong Kong and Singapore today for holidays.
Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements.
— With assistance by Judy Chen