Sumitomo Mitsui DS Asset Management sold its entire holdings of French government bonds due to concerns about France's fiscal situation, shifting funds to German bunds and short-term Japanese government bonds. The risk premium in euro-area government bonds rose sharply, signaling spreading worries about France's fiscal and political stability. France's government announced plans to narrow its budget deficit through spending restraint and tax increases, a move that risks toppling the prime minister and heightening investor anxiety over national debt.
Meanwhile, US Treasuries and German bonds gained as investors sought safe-haven assets. The shift followed a broader bond selloff driven by oil-price shocks, heavy government borrowing, resilient growth, and AI-related fundraising. Shinji Kunibe, lead portfolio manager of the global fixed-income group at Sumitomo Mitsui DS AM, stated, "French bonds have offered relatively attractive carry, but we’ve sold our entire position given the recent developments," adding that funds were mostly redirected to bunds and some to short-term JGBs.
He noted Japan's improved fiscal communication under Prime Minister Sanae Takaichi, contrasting it with France's approach, and emphasized that market reassurance comes from clear government commitment to fiscal discipline.
উৎস: Bloomberg Markets · সারাংশ: HeadlinesBriefing