(Bloomberg) -- Competition is heating up for government bond traders with experience who can navigate volatile markets as the Bank of Japan seeks to further raise interest rates, and Mizuho Securities Co. is looking internally for former dealers who can return to the trading floor.

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“It is inevitable that there will be a flow of personnel” with some traders hired by other firms, said Yoshiro Hamamoto, chief executive officer of Mizuho Financial Group Inc.’s brokerage unit. But the company has “plentiful human resources” and it’s bringing back past “top earners” to dealing from other departments, he said in an interview.

One example is a senior trader with more than 25 years of experience who was assigned to medium-term government bond dealing in November last year from another department, Hamamoto said, without identifying the person. Mizuho Securities doesn’t intend to increase traders on a net basis for now.

Banks have been rushing to beef up their ranks of experienced bond traders after the BOJ raised interest rates for the first time in 17 years in March and once more in late July. Those moves increased the risk of interest rate losses in a market used to having bond yields at 0% or lower, with the ensuing turmoil highlighting the need for skilled traders. Hedge funds are further bolstering their teams of Japan-specialist traders.

With interest rates rising in Japan, Hamamoto expects that some funds—particularly those of foundations, corporations, schools and other organizations—that had been heavily invested in stocks and foreign bonds will shift to yen-denominated assets like Japanese government bonds or corporate notes.

--With assistance from Umesh Desai.

(Adds CEO comment on fund investments in last paragraph)

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