Mizuho Financial Group is preparing for short-term market disruptions if investor predictions of a soft landing in the United States prove wrong, by stocking up on easily-sellable assets such as government bonds.
Market participants appear to be overconfident that U.S. policymakers can rein in inflation without triggering a recession, Kenya Koshimizu, co-head of global markets at Japan’s third-largest lender, said in an interview last week.
To cushion the impact of any shocks, including an economic slump in the U.S., Mizuho has been buying Treasury bonds, U.S. government agency bonds and other assets that are easier to sell or hedge against price declines, Koshimizu said. The bank has removed collateralized loan obligations and other credit products from its $280 billion securities portfolio, he said.
