BTMU considering quitting as JGB primary dealer
Reuters reports that the Bank of Tokyo-Mitsubishi UFJ is considering quitting as a Japanese government bond primary dealer.
Mitsubishi UFJ Financial Group is the world's second-largest bank holding company and second largest public company in Japan.
The question is, why do they want out?
"We are not sure about the wisdom of keeping primary dealer status when we are reducing JGB holdings," said an unnamed senior BTMU official in the Reuters report.
Could they see JGBs as so costly, and dangerous, that they don't want to hold inventory? Maybe there's no money to be made in dealing with the BOJ holding all the cards.
Reuters said the move comes as MUFG and rival Japanese banks have been reducing their JGB holdings in recent years.
On that note, benchmark 20-year Japanese government bond yields just hit a record low of 0.215%. Who could blame them for not wanting to own those for a second?
