Sumitomo Mitsui DS fully liquidates French government bonds and shifts investment to German bonds and short-term Japanese bonds.

(1) Sumitomo Mitsui DS Asset Management, due to concerns about France's fiscal situation, has sold all its holdings of French government bonds and shifted funds to German government bonds and short-term Japanese government bonds. (2) On Thursday, risk premiums on eurozone government bonds rose sharply, indicating that market concerns over France's fiscal and political situation are starting to spread to other markets. (3) Meanwhile, US Treasuries and German bunds rose, and spreads between French and Italian government bonds surged. (4) Shinji Kunibe, Chief Portfolio Manager of the Global Fixed Income Team at Sumitomo Mitsui DS Asset Management, stated that French government bonds previously offered relatively attractive holding yields, but given recent developments, all holdings have been sold; funds have mainly been shifted to German bunds, with some also allocated to short-term Japanese government bonds. (5) He noted that he has been paying particular attention to the extent to which governments are committed to maintaining fiscal discipline; unlike the French government, Japan has begun to strengthen communication with the market, providing a certain sense of reassurance.