In Japan, Nomura’s chief Koji Nagai took over as Nomura’s chief executive back in 2012 and followed that appointment with a $1bn cost-reduction plan that was criticized both externally and internally for failing to target the inefficient divisions of Nomura’s domestic operations in Japan. The latest program will see the company close more than 30 of its 156 domestic retail branches. What is far more interesting is that fact that Mr Nagai has stated that there are macroeconomic “megatrends” that have affected the industry as a whole. He stated that: “There is no liquidity any more so the market is dead because of the central bank’s monetary policy.” Mr Nagai confirmed what I have been stating that “The fixed-income market is dead due to the zero interest rate.”
Both the central bank of Japan and of Europe have destroyed their respective bond markets. Looking forward, we are facing a very dark period when it comes to the ability of governments to continue to function.