Japan credit default swaps brush off international events

Credit default swap spreads in Japan tightened across the board this week, brushing off heightened diplomatic tensions with North Korea and the threat of war in Iraq, as technical factors continued to support the Japanese market, dealers said.

“International events have had no impact in Japan and there was no particular volatility on the market to offer any arbitrage,” noted one trader. As a result, the trading week remained quiet, with fewer than 10 trades on Friday, the busiest day of the week.

The continued presence of protection sellers on the market kept spreads tight. Dealers noted that protection selling came from participants cleaning out their books.

Names in the electronics sector traded most, with computer maker Fujitsu