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VIEW: Bank of America Research note that in....>

JGBS
JGBS: VIEW: Bank of America Research note that in order "to fund the
government's emergency economic response to COVID-19, JGB issuance is projected
to increase considerably from the FY20 initial budget level. At the same time,
the BoJ's purchases of JGBs will probably increase in line with issuance.
Currently, the BoJ absorbs about 70% of new JGBs, and its stance is unlikely to
change even if issuance increases. Also, the strong demand of life insurers for
superlong-term JGBs, even with low yields, will probably continue in FY20.
Foreign investors, who have recently been the second-biggest purchasers of JGBs
after the BoJ, might not maintain the same level of demand amid fading
expectations of a rate cut. The BoJ looks like it will support JGBs with
residual maturities up to 10yr, while life insurers appear set to do the same
for JGBs with longer maturities."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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