Mizuho Financial Group is preparing for short-term market disruptions if investors’ predictions of a soft landing in the United States prove wrong, by stocking up on easy-to-sell assets such as Treasurys.
Market participants appear overconfident that U.S. policymakers will be able to tame inflation without causing a recession, Kenya Koshimizu, co-head of global markets at Japan’s third-largest lender, said in an interview last week.
To lessen the impact from any shocks, including a U.S. economic slump, Mizuho has been buying Treasurys, U.S. government agency bonds and other assets that are easier to sell or hedge against price falls, Koshimizu said. The bank has off-loaded collateralized loan obligations and other credit products from its $280 billion securities portfolio, he said.
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