BNP Paribas Asset Management has been increasing its holdings in long-dated Japanese government bonds, drawn by a steepening yield curve and renewed domestic investor demand.
The firm has expanded its long-end JGB position from a “very small size” earlier this year to a “moderate to medium size,” with a focus on 20- and 30-year securities, according to James Mc Alevey, head of global aggregate and absolute return.
The strategy reflects growing confidence that Japan’s bond market is regaining traction among local investors, supporting prices on longer-dated debt as yields remain compressed at the front end.
The move adds to signs that overseas fund managers are becoming more constructive on Japanese rates, betting that the Bank of Japan’s ultra-loose policy framework will continue to compress short-term yields while lifting the appeal of longer-dated bonds.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing