04-05-2022, 01:31 PM
The latest data from BMO Capital Markets show the largest overseas holder of Treasuries has offloaded almost US$60 billion over the past three months. While that may be small change relative to the Japan’s US$1.3 trillion stockpile, the divestment threatens to grow.
That’s because the monetary path between the US and the Asian nation is diverging ever more, the yen is plumbing to 20-year lows and market volatility stateside is breaking out. All that is ramping up currency-hedging costs and completely offsetting the appeal of higher nominal US yields, especially among large life insurers.
That’s because the monetary path between the US and the Asian nation is diverging ever more, the yen is plumbing to 20-year lows and market volatility stateside is breaking out. All that is ramping up currency-hedging costs and completely offsetting the appeal of higher nominal US yields, especially among large life insurers.