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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US
- Japanese Yen-based portfolios were net buyers of 1.68 trillion yen worth of U.S. sovereign debt in March – the most in four months.
- While the cost of hedging investments in Treasuries via currency forwards has slumped to near the lowest it's been in years at just about 29 basis points,
- the hedged portfolio settles for a yield of 1.39% on the 10-year Treasury and forgoes any possible appreciation in USD/JPY down the line.
- Although U.S. 10-year yields are still lower than their March highs, they have the potential to climb in the months to come if concerns about the trajectory of inflation in the U.S. and speculation about a taper time line mount
- In turn, that would open the path for broad dollar appreciation, including against the yen.
- Bloomberg Analyst notes that, the DXY Index is undervalued by about 7% in the current G-10 currency model, and the greenback may partly close that gap.
- Yen-domiciled investors may decide they would be better off accepting the currency risk over the remainder of the year rather than hedge their portfolios.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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