Japan repo rates are now the most negative ever
- Banks are on the hunt for US dollars
- And using JGBs to as (one form of ) collateral for USD swaps
Its worth reading this Bloomberg piece, especially if you are new to this sort of financial market plumbing
- Rates in Japan's repo market -- where bond holders connect with investors looking to borrow them -- hit a record Tuesday. The introduction of cheaper, more regular dollar-swap auctions has generated huge demand from U.S. currency-starved dealers who are keeping their JGBs to put them down as collateral.
