Skip to content
Subscriber Only

Aftermath of Japan's 'Golden Week' Could Squeeze Treasury Shorts

Images Of Kyoto Tourism As Tourist Influx Helps Japan's Economy Amid Weak Local Demand
Photographer: Akio Kon/Bloomberg

Japan has kicked off Golden Week, a stretch of holidays that typically leads to quieter markets in Asia. But the festive season could portend bad news for investors who are betting against Treasuries: The week after the holidays usually sees an uptick in purchases that could squeeze short sellers, Morgan Stanley strategists found.

Japanese firms, led by life insurers and commercial banks, make up for the inactivity during Golden Week with net purchases of non-yen bonds during the following week, according to the Morgan Stanley study, which tracked data in May from 2009 to 2017.