Japanese bonds: second thoughts
Article Abstract:
The market for Japanese government securities has performed well despite problems with the Japanese economy as a whole. The yield for 10 year bonds has dropped to 2.7% in 1995 from some 8% in mod-1990. This leads to concern as to the impact of economic recovery on bonds. The recession looks set to end with fiscal measures to boost the economy. Increased consumption could fuel inflation, and the budget deficit could amount to 5% of Japan's gross domestic product in the financial year of 1995 to 1996. Optimists argue that interest rates will have to stay very low until recovery is clearly established.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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Japanese government bonds: bulls in retreat
Article Abstract:
Japanese government bonds have seen a drop in 10-year yields, but this could end, according to Barton Biggs from Morgan Stanley. Deflation is likely to be replaced by inflation in Japan. The budget deficit represents some 7.6% of gross domestic product (GDP), net public pension liabilities are 200% of GDP compared to 43% for the US, and the private sector also has a high debt burden. Some inflation is necessary to escape the liquidity trap. The Ministry of Finance is using low interest rates and tight fiscal policy to help boost the economy while controllingt the budget deficit.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1997
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Japan: more gloom
Article Abstract:
Yields for Japanese bonds have risen due to perceptions that economic recovery could be stronger than was initially thought. New data could show a contraction in the economy for 3rd qtr 1996 which means that bond yields will drop. The government may be called on to loosen fiscal policy in order to boost growth, but critics argue that deregulation would be more effective and that tight fiscal policies are needed due to weak public finances.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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