Japanese Bonds at Turning Point as Hedge Fund Fire-Sale Ends
- Key test looms in 10- and 30-year auctions due this week
- Foreign funds appear to be back adding long positions in swaps
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Japan’s out-of-favor bonds look to be turning the corner.
Demand for the beleaguered securities is starting to recover at debt sales after sinking over the previous six months. The reasons: more attractive (and stable) yield levels, and an end to the wave of foreign selling. Auctions for a combined 2.8 trillion yen ($26 billion) of 10- and 30-year bonds this week may help confirm if this rebound is for real.