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Tuesday, 25th January 2011
In General Japan News,

Japanese debt yields fall

Japanese debt yields have dropped to their lowest point in nearly two years and could lead to a bond sell-off.

Bloomberg reported that it is likely that many European banks could now take step to sell more Samurai bonds following 2010's record issuing of securities.

"Europe's top banks may need to pay more spread than last year to sell Samurai bonds, but there's a difference between investors in Japan and Europe," explained Yasuhiro Matsumoto, head of credit research at Shinsei Securities Co in Tokyo.

He added that many Europe-based investors are more cautious about the financial crisis but many Japanese investors believe that Samurai bond remain the only real option for significant yields.

A number of key institutions such as Barclays, Credit Suisse, HSBC Holdings, Royal Bank of Scotland and UBS currently have Samurai bonds that are set to mature in 2010.

Meanwhile, Japan's prime minister has called for all of the political parties to join forces to tackle the nation's debt crisis.

Written by Susan Ballion.