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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.
BONDS
Given the start of the new Japanese fiscal year plenty of attention has fallen on the potential for Japanese investors to deploy fresh capital into foreign bonds. Australia & the U.S. continue to present the most attractive destinations from an FX-hedged yield perspective, although the dynamics surrounding the broader reflation trade narrative and its impact on AUD/JPY (assuming that Japanese investors choose to enter a large proportion of Aussie bond positions from an FX-unhedged stance) may be key for allocation in the short term.
Fig. 1: Selected Foreign FX-Hedged (From The Perspective Of A Japanese Investor) & JGB Yields (%)
Source: MNI - Market News/Bloomberg
| FX-Hedged Yield (%) | Conventional Yield (%) | |
|---|---|---|
| U.S. 10-Year | 1.3243 | 1.6739 |
| Germany 10-Year | 0.0757 | -0.325 |
| France 10-Year | 0.326 | -0.075 |
| Italy 10-Year | 1.0924 | 0.693 |
| Spain 10-Year | 0.742 | 0.341 |
| UK 10-Year | 0.5352 | 0.773 |
| Australia 10-Year | 1.5721 | 1.7498 |
| Japan 10-Year | -- | 0.099 |
| Japan 20-Year | -- | 0.462 |
| Japan 30-Year | -- | 0.662 |
| Japan 40-Year | -- | 0.704 |
MNI London Bureau | +44 0203-865-3809 | anthony.barton@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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