Japan's Nissay Asset Management Corp is buying more US Treasuries, Chinese government debt, and credit funds because of expectations that the coronavirus outbreak will pressure central banks to ease monetary policy.
Nissay is betting that global markets will experience another sell-off once the economic drag caused by the epidemic shows up in data from China and other countries, Toshinobu Chiba, the company's chief fixed income portfolio manager, said on Thursday.
Nissay is buying US Treasuries with durations from three to seven years and hedging the currency risk in the forwards market, Chiba said. The yen is likely to rise against the dollar, because the US Federal Reserve, which surprised investors with a 50 basis point rate cut on Tuesday, has more room to ease policy than the Bank of Japan, Chiba said.
Nissay is also increasing investment in Chinese government bonds as well as extending durations, he said. In the United States, Nissay is interested in increasing exposure to corporate debt and is trying to buy into newly issued credit funds, according to Chiba.