Japanese default swap spreads tight despite bearish equity market

- Mia Trinephi
- 20 Dec 2002

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“When Japanese [interest] rates are at zero, you’ve got to put your money somewhere,” said one Tokyo-based trader. In other words, investors seeking to offer credit protection to collect the premiums as a way to enhance their returns have helped keep Japanese credit default swap spreads tight.

The trader added that activity related to convertible bonds from arbitrage accounts lightening their books ahead of the year-end, was also helping credit default swap spreads brush off Japan's grim economic

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