Reply #34: Big Japanese banks cut bond exposure

[54anickel]

http://news.ft.com/cms/s/2c69533a-6e3e-11d9-a60a-00000e2511c8.html

Japan's leading banks sold a net Y2,170bn in yen bonds in December, the biggest monthly amount in this fiscal year, in a move that signals they are likely to continue to pare down bond exposure in the year ahead.


Most of the bonds sold by Japan's "city banks" - the four leading banks - were government bonds (JGBs), according to the Japan Securities Dealers' Association.

Total net sales in the first nine months of the year that ends on March 31 were just over Y8,000bn.

Analysts said the move signalled a desire to lock in profits.

John Richards, a strategist at Barclays Capital in Tokyo, said: "Their lack of JGB buying reflects a more bearish long-run view on the direction of rates, which in turn is fundamentally based on their belief that the current recovery is sustainable."

The government has been insisting the economy, which almost fell into recession in the six months to September, will pick up, blaming the weakness on a slowdown in the US and a build-up of inventories in the technology sector.

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