Monday, July 12, 2010

Japan Pension Fund Becomes Net Government Bond Seller

So far every bet against JGB´s was a disaster.... But is at least not insignificant when the largest buyer for years has turned to a net seller...... I think when you take a look this link, the following presentation, the confident Rating Agencies & yields like this i think it´s safe to assume that the upside for bonds is "not substantial"......

Bisher haben Wetten gegen japanische Staatsanleihen etliche in den Wahnsinn und sicherlich auch in den finanziellen Ruin getrieben... Wenn aber nun der mit Abstand größte Akteur in diesem Segment nach Jahren von einem massiven Käufer zum Verkäufer notiert lässt das zumindest aufhorchen.....Wenn man sich diesen Link , die folgende Präsentation , die ( noch ) optimistischen Rating Agencies & die aktuellen Renditen vor Augen führt darf man sicherlich behaupten das sich das Chance/Risikoverhältnis nicht gerade merklich bessert...

Japan - Past the Point of No Return - By Vitaliy Katsenelson

H/T Barry Ritholtz

Flashback March 2010
The biggest JGB holder on the planet – the Government Pension Investment Fund (GPIF) – which has already admitted it’s no longer able to roll maturing bonds, has announced that it will open credit lines so it doesn’t have to sell them to fund its obligations…
Looks like they had to end the desperate attempt to stop the unavoidable....

Sieht ganz so aus als wenn jetzt der Zeitpunkt gekommen ist wo das Unvermeindliche nicht mehr länger hinausgezögert werden kann.....

Japan Pension Fund Becomes Net Government Bond Seller
July 13 (Bloomberg) -- Japan’s public pension fund sold more government bonds than it bought for the first time in nine years, underscoring concern that an aging population will make domestic investors less able to finance state borrowings.

The fund sold a net 443.2 billion yen ($5 billion) of Japanese government bonds in the year ended March 31, according to Bank of Japan data released last month. It held 79.5 trillion yen of the securities at the fiscal year end, 11.6 percent of the outstanding amount.

The retirement of baby boomers -- defined in Japan as those born between 1947 and 1949 -- may strain the public coffers as soon as 2012, according to Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute in Tokyo. “That may be when Japan’s sovereign risk becomes evident,” he said in an interview in May.
So far the € crises has helped to fill the gap......

Da kommt die momentane € Krise ganz passend.....

China bought a record amount of Japanese government bonds in May, in an apparent move to shift more of its massive foreign exchange reserves into Japanese debt. Chinese net purchases of Japanese government bonds soared to Y735.2bn ($8.3bn) in May, far outpacing the Y541bn in JGBs bought from January to April, according to Japanese finance ministry figures.

It will be interesting to see if or probably better when the BOJ will be "forced" to start QE Version 18 & 19..... With or without QE this alternative looks much more promising.....

Denke der entscheidende Faktor dürfte sein was die BOJ in Sachen QE machen wird.... Dürfte da über die Jahrezehnte wohl dann Version 18.0 & 19.0 sein..... Mit oder ohne QE ich denke diese Alternative dürfte in jedem Fall vielversprechender sein

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Blogger jmf said...

I´ll go with PIMCO on this one.....

Kokusai Sees Japan Yields Dropping as Pimco Wary of Demand Gap

July 13 (Bloomberg) -- Kokusai Asset Management Co., which runs the world’s second-largest bond fund, said Japan’s government yields may drop to a record, even as larger fund supervisor Pacific Investment Management Co. expressed concern about the nation’s rising debt levels.

Japanese 10-year yields may slide below 1 percent toward a record low reached in 2003 if concern about an economic slowdown increases, said Akio Kato, team leader for Japanese debt at Kokusai in Tokyo

Pimco said the nation’s government bonds face declines in the longer term. Japan’s public pension fund sold more government securities than it bought in the 12 months ended March 31, the first net sales in nine years, underscoring concern that an aging population will make domestic investors less able to finance state borrowings.

‘Limited Exposure’

“Once Japan is dependent upon non-Japanese investors to support the JGB market, we do foresee some problems,” David Fisher, head of global product management for Pimco, said on a conference call from Tokyo today. “This is one of the main reasons why in the global bond portfolio we have very, very limited exposure to JGBs despite the fact that yields are not so terribly unattractive on a hedged basis.”

11:50 PM  

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