The volatility in Japan’s credit market that forced several issuers to shelve sales is igniting debate about whether to shorten marketing periods to help deals get done.
Bookbuilding in Japan is typically a five-day affair, with the central bank’s long-running commitment to supereasy monetary policy keeping yields relatively stable. But with the yen plummeting, inflation accelerating and the Bank of Japan under pressure to adjust its stance, that drawn-out process is leaving both issuers and investors exposed to the swings of the market and prompting calls for change.
"The market should adopt shorter marketing periods,” said Masayuki Tsujino, senior fund manager at Asahi Life Asset Management, which manages the equivalent of more than $10 billion. "We don’t know what will happen during a marketing period and both sides shoulder various risks” when it takes several days to get a bond deal through, he said.
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