Rising yields are creating buying opportunities in global bond markets, but Japanese investors are likely to stay home.
Japan’s 20-year securities offer a volatility and currency hedged-adjusted yield that’s more than twice that of Treasuries for Japanese investors, according to a Bloomberg analysis. The yield also outstrips that on high-yielding notes from Italy, and outperforms those of six other developed markets.
Japanese bonds have largely escaped the rout that has jolted other debt markets as the central bank’s ultra-loose monetary policy keeps yields locked in a narrow range. The investment patterns of Japan’s funds are worth watching given the Asian nation’s position as the world’s largest net creditor.