The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Japan’s structured credit market holds its breath

Often accused of being unwilling to make use of cutting-edge investment techniques, Japanese institutions are more and more attracted to the heady mix of strong ratings and high yields offered by structured credit. But the development of the market is threatened from several directions, and some worry that an over-cautious investor base could prove as dangerous as a reckless one. Lawrence White reports from Tokyo.

Don't believe the spike


japan-main.gif

WHEN EUROMONEY SET out to gauge the mood of structured credit bankers in Japan as the fallout from the US sub-prime crisis spread east, the initial signs weren’t promising. One banker in Tokyo arrives late for the first time for his meeting, cordial as ever but looking slightly flustered. Another is accompanied by an unprecedented total of three corporate communications officers, one wielding a Dictaphone and all looking somewhat grave. A third banker visibly winces at the mention of the words "sub-prime". Despite the immediate stresses of post-crisis volatility, however, the general mood among Japan’s credit bankers is positive: long regarded as something of a late-adopter of innovative financial products, the country’s markets are starting to catch up and a new generation of structured credit products that cater to the unique demands of the investor base has been unleashed. The question on everyone’s minds is what the long-term fallout from the sub-prime crisis will be, and whether the developing structured credit market will suffer a serious setback.

"I came back to Japan from London in 2003," says Yasuhiro Shibata, general manager, global structured credit products at Mizuho, "to find that no real Japanese CDO market existed.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree