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A $121 Billion Japan Fund Is Buying Spanish Bonds Despite Election Risks

  • Spanish debt makes up 12.3% of Mitsubishi’s flagship fund
  • Spain’s strong fundamentals to be in focus after vote: Higuchi
A Spanish national flag flies at the Pla de Palau square in Barcelona, Spain.

Photographer: Bloomberg/Bloomberg

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As Spain hurtles toward its third election in four years, Mitsubishi UFJ Kokusai Asset Management Co. is buying the nation’s bonds despite the looming political uncertainty.

Wider spreads and better economic fundamentals than some of the euro area’s other major economies mean Spanish bonds have the potential to outperform, according to Tatsuya Higuchi, executive chief fund manager at Mitsubishi UFJ in Tokyo. The debt made up 12.3 percent of the money manager’s flagship Global Sovereign Open fund at the end of January, the highest single-country holding after U.S. Treasuries.