Pimco’s vote of confidence in the market will give reassurance to other investors, given the firm’s clout in global fixed-income. Japan’s once sleepy debt market has taken a starring role in recent turmoil, turning the country’s government bond auctions into closely-watched barometers of stress — with the potential to spread volatility from Australia to the US.
Investors can pick up bargains in Japanese government bonds despite a wave of recent selling that has spread volatility throughout global debt markets, according to Pacific Investment Management Co.
The bond fund manager, which oversees over US$2 trillion ($2.58 trillion) in assets, has released a report on the recent volatility in Japan’s bond market. One surprising conclusion: The possibility of more quantitative tightening by the Bank of Japan could be a good thing for JGBs, since it will relieve pressure on the long-end of the curve, where the central bank is less active.
