Last month, ultra-long Japanese yields jumped after an auction of 40-year sovereign bonds met the weakest demand in almost a year, adding pressure on the government to reduce issuance. However, in a pivotal moment for bonds and equities, the government subsequently delivered a clear sign it may be preparing to adjust issuance after the rout. The finance ministry sent a questionnaire to market participants on Monday evening, asking for their views on issuance and the current market situation.
- We can see the JGBs consolidating, similar to what they did in 2022/3, but we’re conscious that the trend remains bearish for JGBs (yields higher).
MM is bullish on JGB bond yields, medium/long-term
