VIEW: BofA research notes that "the new.......>

JAPAN: VIEW: BofA research notes that "the new fiscal year has started with

lower yields for lower risk assets and wider credit spreads on higher economic

uncertainty compared to FY19. We think some Japanese money will flow back to

JGBs while investment in foreign bonds will be contained. We expect the trend of

investment into foreign equities and alternative asset classes to continue. We

think pension funds are moving back to a normal rebalancing mode. In 1Q20,

Japanese trust accounts bought a record Y4.0tn in foreign bonds with buying

concentrated in January and February. This was likely because public pension

funds, notably the Government Pension Investment Fund, needed to increase

foreign bond exposure before the scheduled announcement of the new model

portfolio at the end of March. Since then, foreign bond purchases by Japanese

investors have slowed."