Matthew Hornbach, global head of macro strategy at Morgan Stanley, said shorting Japanese government bonds is a global fund manager.cryptogameslikeaxieIt is highly unusual for both overseas and domestic investors to make similar bets on one of the major deals of the company.
"Through dialogue with global investors, letcryptogameslikeaxieI believe the most concentrated and certain alpha positions in the global portfolio are low-profile Japanese durations,"Hornbach said at an investor conference in Tokyo on Thursday.
Yields on 10-year Japanese government bonds hit 1% this week as markets bet that the Bank of Japan may reduce bond purchases and accelerate interest rates in response to the weakening yen.
Japanese investors have a different view of their own bond market than overseas investors, Hornbach said. "Based on my experience in the Japanese market, this situation is quite rare at present."
Views on the yen are more diverse, with investors betting on a weaker yen believing that the yen is at a spread disadvantage, while some believing that the yen is undervalued.
Koichi Sugisaki, macro strategist in Tokyo, said Morgan Stanley expects the yen to rise to 146 against the dollar by the end of the year and hit 140 in the first half of 2025 as the Federal Reserve cuts interest rates.
