Bloomberg (July 18)
“The growing focus on the risks associated with the BOJ’s monetary stimulus program—which includes enormous asset purchases, particularly of Japanese government bonds, as well as negative interest rates and yield curve control—comes as its inflation target remains elusive. With no end to its program in sight, the BOJ is under increasing pressure to mitigate risks and explain its thinking about an eventual exit.” Bloomberg calculated that the BOJ already owns over 70 percent of all shares in Japan-listed ETFs and could soon own most of the free float in companies like Fast Retailing.0000000000000
Tags: Asset purchases, BOJ, ETFs, Fast Retailing, Free float, Inflation, Japan, JGBs, Monetary stimulus, Negative interest rates, Risks, Yield curve control
Bloomberg (September 16)
Standard & Poors became the latest credit-rating company to downgrade Japan, following earlier moves by Moody’s and Fitch. “Could the Japan downgrade presage a stampede for the exits by international investors? Unlikely.” Most JGB investors are domestic “and probably won’t be concerned about the verdict of U.S. financial services companies, especially ones with the questionable reputations of the credit raters.” Japanese investors will continue to “view Japanese bonds as the ultimate safe zone.”
Tags: Credit rating, Downgrade, Fitch, Investors, Japan, JGBs, Moody's, Reputations Bonds, Safe, Standard & Poors, U.S.
Institutional Investor (May Issue)
“The secret weapon of Abenomics” is the rebalancing of Japan’s Government Pension Investment Fund (GPIF). “The GPIF is diversifying at a pace that’s astonishing for a fund of its size…. In the last six months of 2014, while slashing its JGB holdings, the fund increased its exposure to Japanese stocks by ¥5 trillion, to foreign equities by ¥7 trillion and to foreign bonds by ¥4 trillion.”
Tags: Abenomics, Bonds, Diversifying, Equities, GPIF, Japan, JGBs, Rebalancing, Stocks
Wall Street Journal (April 3, 2013)
“Japan’s quadrillion-yen market for government bonds is grappling with something it usually doesn’t face: volatility. Price gyrations are rising as bond investors try to assess how Prime Minister Shinzo Abe’s fresh attack on deflation will play out in a market accustomed to a steady decline in consumer prices and a cautious, predictable central bank.”
Tags: Abe, BOJ, Bond market, Consumer prices, Deflation, Investors, Japan, JGBs, Volatility