Search DubaiPRNetwork.com

Home >> Banking & Investments

Biggest Japan buying of Italian bonds since 2014

Thursday, August 22, 2019/ Editor -  

Share

Home >> Banking & Investments

By Christopher Dembik, Head of Macro Analysis, Saxo Bank

Dubai, United Arab Emirates -  22, August 2019:    Japanese investors bought into Italian government debt in a big way in June according to the latest figures released by the Japanese government. They increased their portfolio holding by 327bn JPY (roughly 2.6bn euros), which is the largest net monthly increase since the series began five years ago.

The Italian bond market remains attractive for investors. As a matter of fact, the risk of Italy leaving the EU is extremely low. Based on July Sentix survey of 1000 investors, only 4% of institutional investors and 9% of private investors consider that there is a real risk of Italexit within one year. In other words, the risk is virtually close to zero. Adding to that expectations of further ECB stimulus from September, it is not surprising to see the yields spread between Italy and Germany 10-year bonds narrowing to below 200 bps.

In addition, the search for yield in the low interest rate environment coupled with rotation out of German bunds have benefited to Italy. Contrary to many other European countries where the yield curve is negative up to 30 years for Germany or 50 years for Switzerland, it is only negative up to one year for Italy. The 2-year yield is at 0.15% and the 10-year yield at 1.45%.

The next release of purchases by the Japanese government will be on September 9th. We expect that some of the positive flows we have noticed in June should be reversed in coming months due to political tensions within the governing coalition and uncertainty about the Italian budget.

 


Previous in Banking & Investments

Next in Banking & Investments


Home >> Banking & Investments Section

Latest Press Release

Zayed's Ambition mission logo, and MBRSC logo adorn Baikonur Cosmodrome Museum

Mohammed bin Rashid Space Centre & Emirates Foundation organise live sessions fr ...

Tilal Properties showcases Tilal City at Cityscape Global

du and Network International Join Forces to Launch Advanced Payment Solution

Azizi Developments sponsors H.H. Sheikh Mohammed bin Rashid Al Maktoum Italy End ...

Mohammed bin Rashid Space Centre & Emirates Foundation organise live sessions fr ...

All-new 2020 Toyota GR Supra Back to Rule the Sports Car World Once Again

LACOSTE presents Key West (Sport Inspired) collection'

Marks & Spencer unveils the SS19 Modest Collection'

Emirates first on-board for biometric boarding

Etisalat launches ‘Upgrade Anytime' programme for the first time in MENA region

Dubai Land Department strategic partner of Cityscape Global 2019

Why women are critical to global green economy movement

Bangladeshi pride on display as Bangla Tigers join Abu Dhabi T10

Emirates kicks off Rugby World Cup 2019™ with referee Nigel Owens

Persistent Devotion Honed by Time CORUM announces Hu Bing as its new Global Bra ...

Have a Spookily Good Halloween With A Range of Creepy Treats from Marks & Spence ...

Versus Saint Germain

Airbus forecasts need for over 39,000 new aircraft in the next 20 years

Two-i is back at GITEX aiming to help cities in search of happiness