UK credit can benefit from ‘Japanification’

As more government bond curves around the world join the select group trading at negative yields, we are seeing a spike in ‘Japanification’ headlines in the press.

There are two angles to this term. The first is a macroeconomic one, where the scenario features very low growth and inflation, high government debt, and current account surpluses that should give confidence the debt pile can funded domestically. In addition, extremely loose monetary policy keeps the yield curve flat and pretty static, trading at near-zero or negative yields. The hope is that these actions ultimately bring back growth and controlled levels of inflation, something that as we all know has not really happened in Japan.

Volta Finance Limited (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.

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