Wealthy Nations Daily Update - JGB/Qatar

So the Japanese Government ten-year benchmark bond (JGB) traded with a negative yield in Tokyo overnight, the first for any G7 economy. Trading at -0.035% that means around 70% of outstanding JGBs are now trading with a negative yield. Safe haven buying in a holiday shortened week for Asia amidst a plunge in the Nikkei, down 5.4% at the close, was the main cause.

Wealthy Nations Daily Update - BoJ

The Bank of Japan (BoJ) has released a summary of opinions expressed by the 9 board members at the 28th - 29th January policy meeting. At the January meeting the BoJ took the market by surprise as they cut a key interest rate to below zero, in what some see as a bold move in its continued efforts to overcome deflation. The interest rate on excess reserves was taken down to -0.1%. Of the 42 economists surveyed by Bloomberg, only 6 predicted the move. Interest rates have not been above 0.5% this century, a long way from the 8% seen in the 1980’s. As expected the BoJ left QE at a rate of JPY 80bn a year.

Wealthy Nations Daily Update - Japanese IPO’s

Shares of the Japan Post trio finally began trading today after a decade old political promise of privatisation and months of hype. The USD 12bn IPO was the largest since Alibaba’s record USD 25bn issuance in September last year. Eleven major underwriters and countless local brokerages have been focusing on this deal along with swathes of domestic savers who are keen to move some of their mountain of savings into something safe, familiar and slightly less unspectacular than JGBs. Likewise government officials are relieved and see this as the beginning of further privatisation in order to reduce wasteful public spending and raise circa USD 33bn for reconstruction funds, primarily to help rebuild in the northeast areas damaged by the 2011 earthquake.

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