ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Articles

BTMU says it will drop out as JGB primary dealer

Bank of Tokyo-Mitsubishi UFJ will become the first domestic financial institution to quit as a primary dealer of Japanese government bonds.

TOKYO -- Bank of Tokyo-Mitsubishi UFJ has informed Japan's Finance Ministry that it will cease to serve as a market maker for Japanese government bonds, a move driven by the growing burden of holding the notes under negative interest rates.

Top officials from the bank and the ministry spoke on the issue Monday, sources said. The ministry plans to accept the request and is expected to revoke BTMU's primary-dealer status as early as the end of June. The bank likely indicated that it will stay active in JGB trading and that affiliated brokerages will remain primary dealers.

Japan has 22 primary dealers, which have a direct line to financial authorities in exchange for an obligation to bid on a certain percentage of JGBs in government auctions. The core banking unit of Mitsubishi UFJ Financial Group will be the first Japanese financial institution to quit as a primary dealer, though foreign brokerages have done so in the past.

The withdrawal of Japan's largest megabank from the ranks could affect the smooth digestion of future JGB issuances and the Bank of Japan's monetary policy.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 19th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media