Japan's vanishing T-bill stash could be about to make a comeback
TLT•Japan held $31 billion in U.S. T-bills in August, a historical low, but Deutsche Bank estimates it could add $80 billion to $100 billion by the middle of next year.
1. Holdings hit a low
Japan held $31 billion in T-bills as of August, equal to 2.9% of its U.S. Treasury portfolio; both figures were historical lows. Deutsche Bank analysts said the bills were likely sold to fund several rounds of currency intervention to support the yen.
2. Potential rebuild
Deutsche Bank estimates Japan could add $80 billion to $100 billion in bills by the middle of next year. The bank said renewed Japanese buying and resilient bill spreads should ease concerns that heavy bill supply will overwhelm the market in the near term.
