Mizuho Financial Group is taking precautions against potential market disruptions in the United States by acquiring easy-to-sell assets like Treasurys. Market participants are overly confident in the ability of U.S. policymakers to control inflation while avoiding a recession, according to Kenya Koshimizu, co-head of global markets at the Japanese bank.
To mitigate the impact of any unforeseen shocks, including a possible economic downturn in the U.S., Mizuho has been diversifying its portfolio by purchasing Treasurys, U.S. government agency bonds, and other liquid assets. The bank has also reduced its exposure to riskier assets like collateralized loan obligations, totaling $280 billion, which can be more difficult to sell or hedge against price fluctuations.