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2025

2024

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  • Economic Commentary - June Tokyo CPI: Wave of cost pass-throughs may be easing

    Economic Commentary - June Tokyo CPI: Wave of cost pass-throughs may be easing

    27 June 2025 510 KB PDF
    • Inflation slowed in June, mainly on policy factors
    • Wave of cost pass-throughs may be easing
    • Services inflation mainly reflects pass-through of rising goods costs
  • Daiwa's View - Speed of QT and importance of balancing JGB issuance and purchases

    Daiwa's View - Speed of QT and importance of balancing JGB issuance and purchases

    27 June 2025 433 KB PDF
    • Among JGBs currently held by BOJ, about 30% (Y163tn) will be redeemed within next two years and roughly 50% (Y273tn) will be redeemed within four years
    • When BOJ redeems its JGBs, private sector holdings of JGBs will increase through refinancing by MOF; balance between issuance and purchase maturities over next few years will be significant from perspective of interest rate risk
  • Daiwa's Economic View - BOJ June MPM Summary of Opinions

    Daiwa's Economic View - BOJ June MPM Summary of Opinions

    26 June 2025 537 KB PDF
    • Consensus is to watch and wait amid ongoing uncertainty
    • May take until after summer to assess state of real economy
    • But BOJ emphasizes upside risks to inflation
    • Key focus at July MPM: Comments on balance of risks to economy/inflation
  • Daiwa's View - Unexpected plan to reduce issuance of 20-year JGBs

    Daiwa's View - Unexpected plan to reduce issuance of 20-year JGBs

    23 June 2025 406 KB PDF
    • Contrary to media reports on 19 Jun, issuance of 20-year JGBs to be reduced by Y200bn/auction starting Jul
    • This, together with June BOJ MPM, makes it clearer the care and consideration authorities are giving to 20-year sector
    • Probably aiming to use 20-year sector as bulwark to prevent turmoil in 30- and 40-year yields from spreading to intermediate/long-term sectors
  • Daiwa's View - May price indices in Japan and US confirmed a situation roughly in line with optimal tariff theory

    Daiwa's View - May price indices in Japan and US confirmed a situation roughly in line with optimal tariff theory

    12 June 2025 406 KB PDF
    • While impact of tariffs on US CPI was smaller than expected, BOJ’s Corporate Goods Price Index revealed that Japanese firms are absorbing tariff costs through price reductions
    • The situation is roughly in line with optimal tariff theory, and, if this trend continues, negative impact of tariff policies on US economy may be much smaller than economists expected
    • Meanwhile, as this theory implies greater downward pressure on exporting nations than projected, it may constrain additional rate hikes by BOJ
  • Daiwa's View - BOJ meeting focal points: Interim assessment and QT strategy

    Daiwa's View - BOJ meeting focal points: Interim assessment and QT strategy

    11 June 2025 473 KB PDF
    • Jan-Mar GDP (2nd preliminary); Watch for downward pressure in next GDP reading
    • Ongoing tariff talks: Japan/US tariff agreement unlikely before G7 Summit?
    • BOJ to maintain wait-and-see stance at June meeting amid uncertainty
    • Focus on interim assessment: revision to slower QT pace due to market considerations? 
  • Daiwa's View - MOF mulling JGB buybacks

    Daiwa's View - MOF mulling JGB buybacks

    10 June 2025 679 KB PDF
    • MOF considers buying back some previously-issued JGBs in addition to new issuance reductions
    • Clarified stance on mobilizing all possible policies in conjunction with BOJ’s QT slowdown
  • Daiwa's View - The most notable event will be the 30-year JGB auction

    Daiwa's View - The most notable event will be the 30-year JGB auction

    4 June 2025 370 KB PDF
    • Yesterday’s 10-year JGB auction had a favorable outcome, a reassuring factor regarding investor demand in intermediate/long-term zones
    • That said, the most notable event will be tomorrow’s 30-year JGB auction
    • Focus will be on whether auction goes smoothly amid market segmentation, critical illiquidity, weaker demand from life insurers, and less attractive investment return for overseas investors (i.e., a tighter $ASW)
    • A 30-year JGB compound yield of 2.7% would become a barrier in terms of balance vs. UK gilts