Forex Flash: JGB´s still elevated - Nomura

FXstreet.com (Barcelona) - Nomura strategist Yujiro Goto notes that JGB yields still trade at higher levels than the BOJ's decision and Japanese investors kept selling foreign bonds last week, suggesting lifers have not been actively investing in foreign bonds yet.

He adds that the BOJ is trying to stabilize the market by increasing the frequency of rinban operations after meetings with investors. Further, life insurance companies will start investing in foreign bonds more aggressively after the Bank's efforts have successfully stabilized the JGB market. He writes, “The hedge ratio of foreign bonds may remain at high levels though, as they do not expect much upside potential from current levels and hedge costs remain at low levels.