Japanese government bonds are suddenly worth owning again, and domestic asset managers are hurrying to give ordinary investors a way in. With yields on long-term JGBs now rivalling those of US Treasuries and German bunds, Mitsubishi UFJ Asset Management has joined Daiwa Asset Management and Amova Asset Management in selling investment trusts focused on the super-long bonds.
Yield Surge
Japan’s 30-year JGBs trade at a near 4% yield, higher than Germany’s 30-year bond yield of around 3.6%, and close to the 5.2% of 30-year US Treasuries. The main avenue for Japanese households to invest in government bonds has traditionally been so-called retail JGBs, on offer since 2003 and coming in maturities of 3, 5, and 10 years.
The BOJ is expected to reduce its JGB holdings by 48 trillion yen this fiscal year and to continue that pace of reduction. Against that, the government is expected to increase JGB issuance by 15 trillion yen this year and to continue to tap debt markets to fund a massive stimulus plan and tax cuts.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
