GLOBAL - Barclays Capital has announced it will add Japanese inflation-linked bonds (JGBi's) to its global inflation-linked index at the end of April with an expected weight of 1.2%.
The move follows Japan’s inflation-linked bond issuance in March 2004, and the recent Ministry of Finance announcement to make JGBi’s available to foreign investors on April 1. Previously the Japanese market has been restricted to domestic institutions and central bank investors.
John Williams, head of index products at Barclays Capital, said: We've been tracking Japanese inflation-linked bonds in our stand-alone JGBi index since the market’s inception a year ago. The MoF's announcement now means that the market has become eligible for the global index.
Williams adds: The majority of global linker mandates are actively managed so it's likely that the bulk of foreign investment will initially be opportunistic, however, as Japan's share of the market increases we believe that international investors will need to consider Japan as part of their core inflation-linked portfolio.
The global inflation-linked bond index is one of Barclays Capital’s group of inflation-linked bond indices and is the most widely followed global index for the asset class. The index contains government issued inflation-linked bonds from the US, UK, France, Italy, Sweden, Canada and Australia. Germany is also expected to issue inflation-linked bonds this year and will be added to the index if this occurs.
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