Japan: Bond outflows reshape global yields - Commerzbank
Commerzbank's Volkmar Baur highlights Japanese investors' net selling of foreign bonds and its implications for global yields. Although Japanese investors have recently returned as buyers of French bonds, their selling of US bonds has provided some support to the euro against the dollar.
Japanese flows and Euro support
"Over the past twelve months, Japanese investors have sold JPY 5tn (around EUR 30bn) more in foreign bonds than they have purchased. Over the past 20 years, there have been only three episodes in which Japanese investors were significant net sellers of foreign bonds on a rolling 12-month basis: in 2013-14, in the aftermath of the pandemic in 2022-23, and over the past three months."
"Indirectly, however, it clearly matters for global bond markets whether Japanese investors are reliable buyers of foreign bonds month after month or whether, as has been the case over the past twelve months, they turn into net sellers. There is likely a connection between the rise in global yields and the growing reluctance of Japanese investors to allocate money abroad."
"While Japanese investors have indeed been net sellers of long-term French bonds over the past twelve months, and cumulative net purchases since early 2014 have declined noticeably since the pandemic, they have already returned as buyers over the past three months. It therefore appears unlikely that Japanese investors were responsible for, or even materially contributed to, the recent dislocations in the French bond market."
"Interestingly, however, Japanese investors have primarily been selling US bonds in recent months. From that perspective, Japanese bond flows have recently provided some support to the euro relative to the US dollar."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
McEwen’s $55M Ontario asset sale fuels gold growth plans
US Stock Market Movement | US clinical-stage biopharmaceutical company Retension Pharmaceuticals (RTSN.US) debuts on the US stock market; shares fall over 10% after opening
As of press time, the stock has dropped more than 10%, trading at $10.77.
U.S. Stocks Move | Trex Bio (TRXB.US) Debuts on the U.S. Stock Market, Drops Over 1.3% After Opening
As of press time, the stock has fallen by over 1.3%, trading at $13.805.
BUZZ - Broker Perspectives: Analysts Express Doubts Over Starbucks and Chipotle Acquisition
Latest Update October 9 – The Financial Times reported on Thursday that Starbucks (SBUX.O) has explored a potential acquisition of Chipotle (CMG.N). This move would bring CEO Brian Niccol back to the Mexican burrito chain he once led. Starbucks declined to comment, saying the company remains "fully focused" on its business turnaround. Chipotle's stock fell about 4% to $31.32 on Friday, after surging 6.2% in the previous trading session. Limited strategic rationale BTIG expressed "high skepticism," stating that the deal does not make sense operationally, would cause significant dilution for Starbucks shareholders, and would disrupt management operations. "Over the years we've heard many stories about multi-brand acquisitions... but few have materialized, and even fewer have succeeded," BTIG noted. William Blair pointed out that Starbucks’ $9.4 billion net debt as of June makes it difficult to finance an acquisition and could push the combined company’s leverage ratio to about six times—considered high for the restaurant industry. D.A. Davidson stated the probability of the deal succeeding is 20% or less, given the significant differences between the brands and the apparent lack of clear synergies. Raymond James noted that due to the low overlap in menus, supply chain benefits are likely limited, while performance among multi-brand restaurant platforms has been mixed. eMarketer’s Suzy Davidkhanian commented that Niccol's familiarity may reduce execution risk, but investors might still see the deal as a "costly distraction" during Starbucks’ transformation. (For the convenience of non-English speakers, Reuters automatically translates its reports into several other languages. Automated translation may be inaccurate or fail to include necessary context; Reuters does not guarantee the accuracy of automated translated text and provides it solely for readers’ convenience. Reuters accepts no responsibility for any damage or loss resulting from the use of automated translation functions.)
Crypto prices
More
