Author Topic: CURRENCY WARS: Abe Aids Bernanke as Japan Seen Buying Foreign Debt  (Read 354 times)

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Abe Aids Bernanke as Japan Seen Buying Foreign Debt
14 January 2013
, by Wes Goodman & Daniel Kruger (Bloomberg)


Shinzo Abe is set to become the best friend of investors in Treasuries as Japanís prime minister buys U.S. government bonds to weaken the yen and boost his nationís slowing economy.

Abeís Liberal Democratic Party pledged to consider a fund to buy foreign securities that may amount to 50 trillion yen ($558 billion) according to Nomura Securities Co. and Kazumasa Iwata, a former Bank of Japan deputy governor.

JPMorgan Securities Japan Co. says the total may be double that.

The purchases would further weaken a currency that has depreciated 12% in four months as the nation suffers through its third recession since 2008.

The support would help Federal Reserve Chairman Ben S. Bernanke damp yields after the worst start to a year since 2009, according to the Bank of America Merrill Lynch U.S. Treasury Index.

Government bonds lost 0.5% as improving economic growth in the U.S., Europe and China curbed demand for the relative safety of government debt even with the Fed buying $45 billion in bonds a month.

ďI canít imagine the U.S. would be disappointed in Japan buying Treasuries,Ē Jack McIntyre, a fund manager who oversees $34 billion in global debt at Brandywine Global Investment Management in Philadelphia, said in a Jan. 8 telephone interview.

ďThe Fedís been doing all the heavy lifting
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