Just a few weeks after the first Japanese residential mortgage-backed securitization, hopes that MBS transactions will quickly propel Japan into becoming the world's second biggest structured finance market are looking forlorn, as originators now have cheaper financing options and little reason to trim balance sheets.

"Most city banks [the country's strongest, city-based institutions] are doing their own feasibility studies for issuing MBS, but as far as I know there is no specific transaction which is coming soon," remarked an ABS banker in Tokyo.

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