Morgan Stanley Goes Against the Crowd on JGBs

  • Surge in BOJ ownership of 5-to-10 year bonds squeezing supply
  •  Barclays, SMBC Nikko flag odds of 10-year yield testing 0.2%

As most strategists bet that Japan’s bond traders will push the benchmark yield toward 0.2 percent in a bid to test the central bank’s newly-guided boundaries, Morgan Stanley MUFG Securities Co.’s Koichi Sugisaki is going against the crowd.

The 10-year yield will probably settle closer to 0.1 percent — the upper end of the Bank of Japan’s previously acceptable range — as recent market volatility settles down to less extreme levels, according to Sugisaki, who cites the surge in the central bank’s ownership of five-to-10 year debt as a key reason for the contrarian call…

Morgan Stanley Goes Against the Crowd on JGBs

Categories : Finance

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