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Kuroda Bond Splurge Crowds Out Individual Buyers: Japan Credit

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The Bank of Japan’s record bond buying is crowding out individual buyers, narrowing the investor base for the world’s second-largest bond market.

The government last month canceled sales of sovereign notes maturing in 2016 through financial companies to households because buyers would have to pay more in broker fees than they would get in interest, according to the Ministry of Finance. The BOJ’s 80 trillion yen ($677 billion) a year in debt purchases drove two-year yields below zero today for the first time on record in secondary market trading. The coupon on the latest two-year securities was 0.038 percent, less than half the rate in June last year, and compared with about 0.02 percent interest on bank deposits.