Vanguard, BlueBay Bet There Is Juice in BOJ Rate-Hike Trades
- M&G keeps overweight yen, Vanguard reloads short JGB position
- Swaps price about 29% possibility of BOJ hike by year-end
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A handful of big-name investors are still betting on more interest rate hikes in Japan in the coming months, even after a sharp decline in market pricing for more tightening this year.
Vanguard, the world’s No. 2 asset manager, has doubled down on its short position in Japanese government bonds as it still sees the possibility that the central bank can deliver an additional 50 basis points of rate hikes by December. The prospect of another hike has also prompted M&G Investment Management to keep adding to its short JGB position, while staying overweight on the yen. RBC BlueBay Asset Management continues to dump Japan’s 10-year sovereign bonds.