Japan Credit Market Update: Recent volatility subsides into summer lull

Japanese credit default swap spreads were slightly wider this week, but the US July 4 holiday and the beginning of the summer kept the market largely subdued following recent volatility, dealers said.

“Spreads were slightly better bid this week because of jittery stock markets overseas as well as more convertible bond issuance rumours,” said one trader, while another trader reckoned that “people needed to buy protection before going on holiday”.

Overall, trading was calm all week in a widely directionless market, with most spreads coming back to where they started earlier in the week.

The consumer finance and electronics sectors remained the most actively traded this week, with Fujitsu and