U.S. Election Risk Spurs Japan Bond Fund to Cut Treasuries
- Mitsubishi UFJ Kokusai’s Treasury Holdings lowest since 2014
- It boosts exposure to higher-yielding Spanish, Aussie bonds
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As the Federal Reserve’s pledge to keep rates lower for longer diminishes returns on U.S. Treasuries, a Japanese bond fund sees the November presidential election as another reason to avoid them.
“Markets can become unstable as political noises get louder with the presidential election approaching,” Tatsuya Higuchi, executive chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co. said. The firm’s 388.6 billion yen ($3.7 billion) flagship bond fund has reduced its Treasury holdings while adding Spanish and Australian sovereign debt.