With Japanese interest rates stuck around historic lows, it looks like Japanese pension managers, desperate for yield pick-up, are finally going to bite the bullet and start putting significant money into relatively yieldy property backed securitizations and lucrative but riskier subordinated tranches of ABS deals.

In a move that was welcomed by many people involved in the securitization market in Japan, Sumitomo Trust & Banking Co. became the first to acknowledge that the need to pump up investment returns, combined with the lack of alternative investments, leaves it little choice but to put a portion of the money it manages into such paper.

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