ANL 34.52 Increased By ▲ 0.67 (1.98%)
ASC 15.16 Increased By ▲ 0.26 (1.74%)
ASL 24.83 Increased By ▲ 0.32 (1.31%)
AVN 95.00 Increased By ▲ 3.86 (4.24%)
BOP 7.87 Decreased By ▼ -0.07 (-0.88%)
BYCO 10.31 Increased By ▲ 0.53 (5.42%)
DGKC 126.60 Increased By ▲ 1.85 (1.48%)
EPCL 57.16 Increased By ▲ 1.91 (3.46%)
FCCL 24.50 Increased By ▲ 0.09 (0.37%)
FFBL 27.96 Increased By ▲ 0.01 (0.04%)
FFL 16.04 Increased By ▲ 1.14 (7.65%)
HASCOL 10.02 Increased By ▲ 0.28 (2.87%)
HUBC 80.00 Increased By ▲ 0.83 (1.05%)
HUMNL 6.45 Increased By ▲ 0.21 (3.37%)
JSCL 20.41 Increased By ▲ 0.50 (2.51%)
KAPCO 40.94 Increased By ▲ 0.69 (1.71%)
KEL 3.87 Increased By ▲ 0.02 (0.52%)
LOTCHEM 17.24 Increased By ▲ 0.54 (3.23%)
MLCF 46.91 Increased By ▲ 1.17 (2.56%)
PAEL 36.17 Increased By ▲ 2.69 (8.03%)
PIBTL 10.49 Increased By ▲ 0.19 (1.84%)
POWER 9.35 Increased By ▲ 0.15 (1.63%)
PPL 85.74 Increased By ▲ 0.16 (0.19%)
PRL 25.71 Increased By ▲ 1.21 (4.94%)
PTC 9.45 No Change ▼ 0.00 (0%)
SILK 1.17 Decreased By ▼ -0.09 (-7.14%)
SNGP 39.36 Increased By ▲ 0.10 (0.25%)
TRG 159.61 Increased By ▲ 11.13 (7.5%)
UNITY 30.75 Increased By ▲ 1.12 (3.78%)
WTL 1.43 Increased By ▲ 0.23 (19.17%)
BR100 4,852 Increased By ▲ 65.72 (1.37%)
BR30 25,671 Increased By ▲ 690.82 (2.77%)
KSE100 45,186 Increased By ▲ 445.12 (0.99%)
KSE30 18,485 Increased By ▲ 152.7 (0.83%)

Coronavirus
VERY HIGH
Pakistan Deaths
15,329
10024hr
Pakistan Cases
715,968
513924hr
Sindh
268,284
Punjab
245,923
Balochistan
20,178
Islamabad
64,902
KPK
97,318
Markets

Japan investors dump record amount of Aussie bonds in Feb, also sold US bonds

  • That changed after the Reserve Bank of Australia slashed its interest rates to near zero percent.
08 Apr 2021

TOKYO: Japanese investors sold a record 915.3 billion yen ($8.35 billion) (A$10.95 billion) of Australian dollar bonds in February, the peak month of a global bond market sell-off, finance ministry data showed on Thursday.

Bond prices tumbled earlier this year as vaccine rollouts and massive stimulus by the US administration fuelled hopes for a faster economic recovery from the coronavirus pandemic-induced shock.

Japanese investors went on a record Aussie bond buying spree last year when its bonds had become relatively attractive, due to bigger plunges in bond yields in many other developed countries.

"Reflecting elevated selling pressure, Australian fixed income was a big under performer through this period, with the benchmark AU/US 10-yr bond spread blowing out to about 50 basis points at one stage from 7 basis points at the start of the month," said Robert Thompson, macro rates strategist at RBC Capital Markets in Sydney.

The Australian 10-year bond yield rose to as high as 1.973% in late February. During the same period, US 10-year notes yield also rose, but less than Australian peers, to around 1.60%.

At the start of year, both stood around 0.95%.

In February, Japanese investors also sold 914.7 billion yen ($8.34 billion) of US dollar bonds, their first net selling in six months.

While Japanese investors have long been a big player in US bond markets, the world's largest, their massive foray into Australia is relatively new.

Many institutional players had limited exposure to Australia until last year because the cost of currency hedging against the Australian dollar used to be very expensive.

That changed after the Reserve Bank of Australia slashed its interest rates to near zero percent.

Because of such currency hedging, Japanese flows hardly have a limited impact on the Australian dollar/yen exchange rate.

Analysts said their selling may have subsided already and they could start buying again after their financial new year began on April 1.

"Australian bond yields are now attractive so there should be some demand from Japanese," said a strategist at a US brokerage.