Tokyo fund buys China bonds for first time on Japanification bet

The deflation-fueled outperformance of Chinese bonds has lured in a Tokyo-based investor for the first time.

A team that oversees investment in foreign government bonds at Asset Management One started buying China’s debt in October and has since boosted exposure to the country’s interest-rate risk, Hikaru Tanaka, fund manager at the Tokyo-based company, said in an interview on Friday.

China’s economic struggles involving excessive debt and real estate “are what Japan experienced in the 1990s,” Tanaka said. “Our long-term view is that it’s inevitable for China to follow the path of Japan.”