Pimco Still Bullish as Japan Superlong Bonds Outperform in 2016
- Fund manager has stuck with super-long debt since October 2014
- Potential for more BOJ stimulus in second half of year: Pimco
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Pacific Investment Management Co. is keeping faith in the Bank of Japan’s bond-buying stimulus, as 2016’s global market panic delivered bumper returns for super-long debt.
Pimco sees further room for longer-maturity sovereign yields to fall toward shorter ones, as the bonds benefit from BOJ stimulus. Governor Haruhiko Kuroda quadrupled purchases of bonds maturing in more than 25 years in October 2014. Debt due in greater than 10 years returned 1.2 percent this year as of Jan. 13 after gaining 2.5 percent last year, according to Bank of America Merrill Lynch indexes. Notes maturing in 10 years or less have returned 0.2 percent this year, after a 0.4 percent gain in 2015.