One of 91AV原创 largest regional banks is testing the country’s choppy bond market by investing in shorter-term notes to secure higher returns, while avoiding longer-dated securities as interest rates rise.
Joyo Bank has been selling low-yielding Japanese government bonds bought before the central bank scrapped its negative-rate policy two years ago, and replacing them with higher-yielding notes, Yoshitsugu Toba, who heads the markets division, said. It is purchasing the shorter end of medium-term bonds, referring to those with two- to seven-year tenors.
Joyo Bank’s cautious approach reflects a broader trend among Japanese financial institutions, which are reassessing how to manage their assets as domestic interest rates increase after years at rock-bottom levels. Bond yields are climbing after the Bank of Japan ended its era of unprecedented monetary easing and doubts over fiscal discipline grew under Prime Minister Sanae Takaichi’s administration.
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