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JGB Market Research Hub

The JGB market is currently defined by the Bank of Japan's strategic transition toward tapering its monthly purchase schedule, with analysts projecting a reduction to a ¥2 trillion pace by early 2027. This trajectory is intended to align with rising policy rates and mitigate concerns regarding 'debt monetization' while maintaining a healthy market environment where short-term liquidity remains ample. Macroeconomic indicators support this measured approach, as Tokyo's core CPI is expected to cool to +1.8% alongside weakening industrial production, providing a backdrop of relatively benign inflation. Despite the upward pressure on yields, domestic institutional investors, including insurers and regional banks, have emerged as key net buyers in the super-long and medium-term sectors. Conversely, foreign investors have been observed unwinding flattener trades by selling super-long bonds, while trust banks are increasing JGB holdings to rebalance portfolios following equity price gains. Looking toward 2030, researchers suggest the BOJ may eventually need to increase purchases again to maintain a target reserve-to-GDP ratio of approximately 35%. Overall, the market shows signs of adapting to a higher yield environment even as structural shifts in domestic asset allocation begin to influence yen stability.

23 reports available

Japan: What Is Sanaenomics? thumbnail

Japan: What Is Sanaenomics?

Crédit Agricole Corporate and Investment Bank·Jun 19, 2026

Sanaenomics is an economic framework focused on shifting Japan from a cost-cutting, austerity-focused model to one of growth through massive public-private investment and high-pressure fiscal policy. The authors argue this pivot is essential for long-term national strength and real wage growth.

Japan: What Is Sanaenomics? thumbnail

Japan: What Is Sanaenomics?

Crédit Agricole Corporate and Investment Bank·Jun 19, 2026

Sanaenomics is an economic strategy aiming to revive Japan's economy by transitioning from a cost-cutting model to an investment-driven one. It targets a 'high-pressure' economy with a 2% output gap to boost corporate growth, wages, and national strength.

Fixed Income Japan: BOJ Policy Update thumbnail

Fixed Income Japan: BOJ Policy Update

Mizuho Securities·Jun 17, 2026

The Bank of Japan has raised its policy rate to 1% amid improved economic conditions and a strategic 'hands-off' approach from the Takaichi administration. Mizuho forecasts a terminal rate of 1.5% with further hikes occurring at a semi-annual cadence.

Foreign Exchange Fund Special Account Surplus to Fund Consumption Tax Cut, FILP Bonds for Increased Defense Spending thumbnail

Foreign Exchange Fund Special Account Surplus to Fund Consumption Tax Cut, FILP Bonds for Increased Defense Spending

Mizuho Securities·Jun 11, 2026

The report analyzes recent government proposals to use Foreign Exchange Fund Special Account surpluses for tax cuts and Fiscal Investment and Loan Program (FILP) bonds for defense spending. It warns that these measures may face significant implementation hurdles and could ultimately trigger upward pressure on JGB yields.

Japan Reluctance to Issue JGBs and Premature Rate Hikes thumbnail

Japan Reluctance to Issue JGBs and Premature Rate Hikes

Crédit Agricole CIB·Jun 1, 2026

The report argues that Japan must abandon excessive fiscal austerity and the 60-year JGB redemption rule to finance strategic investment and avoid premature BoJ rate hikes that could stifle recovery.

Japan Reluctance to Issue JGBs and Premature Rate Hikes thumbnail

Japan Reluctance to Issue JGBs and Premature Rate Hikes

Crédit Agricole CIB·May 29, 2026

The report argues that Japan should abandon fiscal austerity and the 60-year JGB redemption rule to fund strategic growth investments. It warns that premature interest rate hikes by the Bank of Japan could stifle a nascent capex cycle and damage national strength.

Background to Behind the Curve Concerns

Mitsubishi UFJ Morgan Stanley·Jun 2, 2026

JPY Expect Underperformance

RBC Capital Markets·May 14, 2026

JPY Weekly

MUFG·May 25, 2026

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