text: Nomura: Japan's Central Bank Helps US Fed, Homebuyers | Newsmax.com
  Tags: Nomura | Japan | Fed | Homebuyers
  Nomura: Japan's Central Bank Helps US Fed, Homebuyers
  Jody Shenn Sunday, 14 April 2013 03:45 PM
  FHA loans represent about 20 percent of those used in home purchases, according to President Barack Obama's budget last week, which touted the role of the agency in making credit more available after the private market pulled back after 2007. Rates on FHA 30-year loans are 3.39 percent, down from 3.49 percent on April 2, according to Bankrate.com data.
  Last week, the most common type of Ginnie Mae 3.5 percent securities climbed to a three-month high of 108.5 cents on the dollar, from 107.3 cents before the BoJ announcement, according to data compiled by Bloomberg. The yields fell to 1.54 percent, compared with 0.61 percent for 10-year Japanese government bonds.
  The Ginnie-Fannie gap last week reached 2.3 cents on the dollar, the highest this year and up from 1.3 cents at the end of March, Bloomberg data show. The difference has seen several rounds of expansion and contraction this year, first falling to a 16-month low of about 1 cent in February. It then rebounded to as high as 1.7 cents in March as the Fed devoted more of its buying to Ginnie Mae debt, before easing again.
  Beyond mortgage securities, investors are anticipating that the Japanese central bank will influence markets from leveraged buyouts and government bonds in the U.S. to Australian and European investments.
  Morgan Stanley analysts see more of Japan's money moving into the market for collateralized-loan obligations, which package high-risk company loans such as ones used in buyouts.
  "It's not healthy but certainly we have to take it into account in how we make our trading decisions," Ames said. "These days you spend a lot of time thinking about unintended consequences and how other people will interrupt comments, announcements and data" in ways they wouldn't have in the past
  As Japan's central bank doubles its local bond purchases to boost inflation, traders are betting that will bolster demand for U.S-owned Ginnie Mae's mortgage securities, pushing up prices and lowering yields that guide home-loan rates.