Japan

Public sector issuers are printing at the short end of the dollar curve, a tactic they are likely to stick to in the build-up to the next US Federal Reserve rate decision on June 15, said bankers.

A weaker than expected set of non-farm payroll data last week did little to deter issuers on Monday as a pair of borrowers awarded mandates.

BNP Paribas could let go of up to 40 people in its Asia cash equities unit, affecting about 20% of the division's workforce in the region, as it seeks a buffer against the continued soft patch in the market.

Japanese sovereign bonds managed to deliver positive returns on Thursday, while almost every other asset class suffered from the Bank of Japan’s decision to reject further loosening of monetary policy

The fervour of expectation in the run up to this week’s US Federal Reserve and Bank of Japan meetings ended in widespread pain for foreign exchange, equity and derivative market participants.

Dollar-yen currency option prices have risen sharply this week in line with shifting expectations for the Bank of Japan meeting on Thursday, after details were leaked by anonymous officials of a possible negative loan rate to encourage banks to lend.

Japan has unveiled its total loss absorbing capacity (TLAC) framework and in line with expectations has adopted a single point of entry approach with a group’s holding company being the resolution entity.

A reversal in trading patterns last week sent the yen as low as ¥109.70 against the dollar, but recent trading has been driven by aggressive hedge funds unwinding long yen positions ahead of a Bank of Japan (BoJ) meeting in late April.

Issuers stormed out of the blocks with a set of deals across the curve this week, with factors including an increase in swap spreads on the short end, a positive feeling towards the US market since Janet Yellen’s statements in March and the start of the Japanese fiscal year all credited.

Guarantor: Government of Japan

Nomura plans to close most of its equity operations in Europe, shutting down origination, research, sales and equity derivatives. But it will maintain a sales force focussed on bringing Asian products to European clients.

Falling expectations for Japanese inflation and the dovish turn at the US Federal Reserve sent the yen higher last week. This left USD/JPY at the lowest level since October 2014 going into this week, with only a slight retracement on Thursday bringing solace to Japanese exporters.