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2025

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  • Daiwa's View - Impact of fiscal policy and QT on JGB term premium

    Daiwa's View - Impact of fiscal policy and QT on JGB term premium

    5 November 2025 844 KB PDF
    • Launch of Takaichi administration and JGB term premium
    • Term premium is influenced by fiscal policy “stock” variables and QE/QT “flow” variables
    • 1% deterioration in ratio of outstanding JGBs to GDP raises term premium by 1bp
  • FX Pulse - Return of the yen carry trade?

    FX Pulse - Return of the yen carry trade?

    4 November 2025 652 KB PDF
    • Yen’s slide accelerates on dovish view of BOJ MPM
    • FX markets to test Takaichi government's tolerance for weaker yen?
    • Government should allow BOJ discretion to act
  • Daiwa's View - BOJ Outlook Report signals possible turning point

    Daiwa's View - BOJ Outlook Report signals possible turning point

    31 October 2025 871 KB PDF
    • Governor Ueda’s press conference raised possibility of Jan rate hike
    • Outlook Report changes suggest risk of slowdown for BOJ’s rate hiking pace
    • 1% terminal rate scenario entails significant room for super-long JGB yields to decline
  • Daiwa's Economic View - Principles and challenges for PM Takaichi’s “responsible expansionary fiscal policy”

    Daiwa's Economic View - Principles and challenges for PM Takaichi’s “responsible expansionary fiscal policy”

    30 October 2025 394 KB PDF
    • Principle of reducing government debt-to-GDP ratio by increasing fiscal stimulus for GDP (denominator) is correct
    • Aim to achieve specific target each fiscal year? Should target be set at certain debt-to-GDP ratio level? Challenge lies in whether fiscal stimulus will reliably increase GDP
    • Measures to combat rising prices, support wage increases, revitalize regional economies, and other immediate challenges must also be addressed
  • FX Pulse - Different reactions for JGB yields, forex rates at start of Takaichi Administration

    FX Pulse - Different reactions for JGB yields, forex rates at start of Takaichi Administration

    27 October 2025 584 KB PDF
    • On guard for short-term yen depreciation overshoot
    • US-Japan finance ministers’ meeting: Focus on not only BOJ rate hike but also discussions on capital flows
  • Daiwa's Economic View - Fiscal spending for a backup capital scheme

    Daiwa's Economic View - Fiscal spending for a backup capital scheme

    27 October 2025 384 KB PDF
    • Firstly, it is necessary to determine what a backup capital would be
    • If objective of backup capital scheme were to be to foster regional economic hubs, authorities would likely consider balancing this with regional revitalization grants
    • It could take several years before a secondary capital was selected; no applicable prefecture may emerge for the time being, particularly if the metropolitan ward system were to become a prerequisite
  • Daiwa's View - Key points to note at Oct BOJ MPM: Recognition of economy/prices, spreading support for rate hike

    Daiwa's View - Key points to note at Oct BOJ MPM: Recognition of economy/prices, spreading support for rate hike

    23 October 2025 538 KB PDF
    • Domestic economy on track, but high uncertainty assumed for overseas economies
    • Do not expect major differences in recognition between BOJ and new administration
    • No major changes in assessment of economy/prices; the risk balance for economy is also considered to be skewed downside 
    • Expect only board members Tamura and Takata to call for rate hike
  • Daiwa's Economic View - Takaichi administration to frontload defense spending increase

    Daiwa's Economic View - Takaichi administration to frontload defense spending increase

    23 October 2025 384 KB PDF
    • New administration to frontload increase in defense spending to 2% of GDP within FY25
    • Would increase FY25 supplementary/FY26 initial budgets by around Y4tn each versus initial FY25 budget, but no automatic increase in JGB issuance
    • Administration to revise defense spending plans from FY27 by end-2026; we focus on budget size, funding