Yield-Hungry Japanese Investors See End-of-Year Swap Price Hike

This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.

Yes, Japan has negative sovereign debt yields for maturies of less than 9 years.

And now this:

(Bloomberg) — The year-end cost for Japanese investors to borrow dollars with forward swaps is near the highest since the 2008 crisis.

The search for yield has driven Japanese investors to load up on U.S. bonds, exchanging yen for dollars using cross-currency forward swaps. Such activity can create a demand-supply imbalance, especially at financial reporting dates like year-end.

Merry Christmas from Nakatomi Plaza!

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