Japan’s Kamei:Japan Post should diversify investment-FT

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TOKYO, Feb 2 (BestGrowthStock) – Japan’s banking minister Shizuka
Kamei said the government-owned financial conglomerate Japan Post
should buy more corporate bonds and U.S. Treasuries, rather than
Japanese government bonds, the Financial Times reported on
Tuesday.

Japan Post is the largest holder of Japanese government bonds
and a big move to diversify by its two financial units — Japan
Post Bank and Japan Post Insurance — could rattle the government
bond market at a time when the national debt is nearing 200
percent of the country’s gross domestic product.

“Nearly 80 percent of Japan Post Bank’s funds go towards
buying JGBs, but from now on (any increase in deposits) could go
towards buying corporate bonds… and US Treasuries,” FT quoted
Kamei as saying on Monday.

The yield on benchmark 10-year bonds rose 1.5 basis points to
1.345 percent on Tuesday. (JP10YTN=JBTC: )

“(Kamei’s comments) are negative to the JGB market. But that
is as much as we can say at the moment as we don’t know how much
Japan Post Bank would cut its investment in government bonds,”
said Mari Iwashita, chief market economist at Nikko Cordial
Securities.

March 10-year JGB futures fell 0.26 point to 139.14 (2JGBv1: ),
hurt by a stock rally and position-adjustment linked to Tuesday’s
auction of 10-year debt — the market’s main focal point for the
day, traders said.

Many analysts doubt Japan Post, which holds more than
three-quarters of its total assets of about 300 trillion yen
($3.3 trillion) in JGBs, can sharply cut its JGB holdings because
of concern that its selling could destabilise the market.

They also say the bank, despite its size, has few financial
experts to make more active investments any time soon.

Although Japan Post has attempted to expand its lending since
the government began a 10-year privatisation process in 2007, the
effort fell through and its government bond buying has increased.

The privatisation plan was frozen last year after the
Democratic Party-led government ousted the long-ruling Liberal
Democrats in an election. Kamei, in charge of postal reform, has
said he would draft a blueprint for Japan Post’s future early
this year.
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(Reporting by Hideyuki Sano and Rika Otsuka; Editing by Hugh
Lawson)

Japan’s Kamei:Japan Post should diversify investment-FT