Brendan Murphy is shorting 10-year Japanese government bond futures on a wager that it’s only a matter of time before the nation’s central bank tightens monetary policy.
Murphy, a money manager at Insight Investment, which oversees more than $880 billion (¥122 trillion) in assets, is bearish on those JGBs whose yields are capped by the Bank of Japan’s rigid policy as price pressures mount. He’s bullish on 30-year Japanese debt, which isn’t subject to the BOJ’s control.
“We do think that you see yield curve control lifted,” Murphy said in an interview last week. “They’re going to move incrementally toward normalization,” he said, adding that the BOJ “don’t want to be accused of tightening too quickly and going back into a disinflationary environment.”
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