Smaller brokerages are gaining business in Japan’s credit market after former top player SMBC Nikko Securities was affected by a trading scandal.
Tokai Tokyo Securities and Shinkin Securities moved up in the league tables in the first half of the financial year that started in April, surpassing SMBC Nikko, data compiled by Bloomberg shows. SMBC Nikko, the brokerage arm of major bank Sumitomo Mitsui Financial Group, slipped further down the rankings and faces regulatory penalties after the securities watchdog found it engaged in stock market manipulation.
The jostling for business in the ¥89 trillion ($615 billion) market is taking place amid increasingly tough conditions, with companies hesitating to raise funds through bonds as borrowing costs rise. The Bank of Japan’s insistence on maintaining super-easy monetary policy, which is isolating it from hawkish central banks globally, is putting a further dent into investor appetite for low-yielding yen assets.