Japan's successful Olympics bid could help inflation-linked bonds
TOKYO (REUTERS) - One early Tokyo Olympics winner could emerge next month, when Japan holds its first offering of inflation-linked bonds in five years.
Tokyo's successful bid for the 2020 Olympic Games is likely to fan inflation expectations, which in turn should kindle demand when the Ministry of Finance offers the first tranche of 300 billion yen (S$3.85 billion) of 10-year inflation-protected bonds on Oct 8.
"Wherever the Olympics is held, real estate prices tend to go higher. That speculative money might come into Japan, and that might help alleviate deflationary pressure, so it's positive for inflation expectations as well," said Tadashi Matsukawa, head of Japan fixed income at PineBridge Investments.
"To that extent, I think it's positive for inflation-linked bonds," said Mr Matsukawa, who is considering buying some for his portfolio.