Treasury-Beating Aussie Bonds Lure Japanese on Cheap Hedges
- Cost to hedge Australian dollar exposure sinks to 17-year low
- Yields on long-term Aussie debt ‘incomparably high’: Miura
Photographer: Brendon Thorne/Bloomberg
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Australia’s sovereign bond market is re-emerging as an attractive proposition for Japan’s yield-hungry investors.
A combination of superior yields and currency-hedging costs at a 17-year low is boosting the appeal of Aussie debt over Treasuries for Japanese funds, just when they are looking at ways to secure returns amid the virus-induced market turmoil. They have contributed to the record demand seen at Australia’s recent auctions.