Mizuho analyzes the upcoming 30-year JGB auction, highlighting that while Middle East conflict and BOJ rate hike signals create volatility, yield levels at 3.81% and trust bank rebalancing provide strong support.
Key Takeaways
- 1.The 30y JGB yield of 3.810% is considered highly attractive compared to previous auctions and historical averages, providing a strong incentive for long-term investors.
- 2.Portfolio rebalancing demand from domestic trust banks is expected to support the auction, driven by recent global equity market gains and the Nikkei 225 crossing 60,000.
- 3.Concerns regarding fiscal expansion and energy subsidies are unlikely to lead to increased market issuance of super-long JGBs due to available frontloaded refunding bond resources.
Table of Contents
- (1) Positives and negatives ahead of the 30y auction
- POTENTIAL POSITIVES
- POTENTIAL NEGATIVES
- Auction strategy
- (2) Key charts
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Authors
Yurie Suzuki
Securities
JX90NKY
Themes
Fiscal Discipline and Supply DynamicsGeopolitical Impact on Energy PricesMonetary Policy Normalization
Regions
Asia PacificJapan