As yields continued to rise on Spanish sovereign debt, Japanese investors said they were not tempted by the increases and added that such investments were in too much danger from the continuing debt crisis.
Bloomberg reported Wednesday that, wary of the volatility of Spain’s economy, large Japanese investors were steering clear of not just Spanish, but in some cases also Portuguese, Italian and Irish bonds as well. Figures from the Ministry of Finance in Tokyo revealed that in the 12 months ending Feb. 29, Japanese investors sold a net $43.8 billion of euro-denominated bonds.
Among firms avoiding Spain as an investment even as yields climb are Kokusai Asset Management Co., which runs Asia’s largest mutual fund; Mitsubishi UFJ Asset Management Co., a division of Japan’s largest publicly traded bank, and Diam Co., a segment of the nation’s second-biggest life insurer.
Spanish 10-year bonds gained nearly 1% over the past month and early on Wednesday morning in London hit 5.92%. But it is not tempting Japanese investors. Nor is the rising yield on similar-term Italian bonds, which over the same period gained 69 basis points to hit 5.61%.