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2025

2024

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  • Daiwa's View - Market reaction after Upper House election, outlook for JGB market liquidity

    Daiwa's View - Market reaction after Upper House election, outlook for JGB market liquidity

    22 July 2025 385 KB PDF
    • Upper House race resulted in significant loss of seats for ruling parties, but not as damaging as feared
    • Expect downward pressure on super-long JGB yields if JGB liquidity index (that deteriorated sharply before election) improve
    • With election now over, next key topics are tariff negotiations and BOJ interest rate hikes
  • Daiwa's Economic View - Upper House election results and future framework for administration, fiscal policy

    Daiwa's Economic View - Upper House election results and future framework for administration, fiscal policy

    22 July 2025 441 KB PDF
    • Ruling parties lost their Upper House majority, but PM Ishiba announced he will remain in office; uncertainty surrounding future political framework, fiscal policy
    • Ishiba may resign by September following US/Japan tariff talks or due to pressure from within his party
    • Scale of future fiscal stimulus to unfold in economic measures and scale of budget compilation due out between this fall and end of year
  • FX Pulse - Next up: Tariff talks

    FX Pulse - Next up: Tariff talks

    22 July 2025 516 KB PDF
    • LDP-Komeito coalition's Upper House election loss undoubtedly severe, but not as bad as feared
    • Focus shifting to tariff talks; risk US could pursue tough line on tariffs this time
    • Key point is Japanese firms' ability to pass through cost of tariffs to customers
  • Daiwa's Economic View - What changing price/income elasticity imply about tipping point for tariff impact

    Daiwa's Economic View - What changing price/income elasticity imply about tipping point for tariff impact

    18 July 2025 641 KB PDF
    • Potential for prolonged tariffs, changes in automakers' behavior
    • Price elasticity of Japan’s US export volume down, income elasticity up
    • Factors behind falling price elasticity: shift to higher value added, changes in corporate behavior
    • Lower price elasticity mitigates tariff shock; risk is US recession
  • Daiwa's View - JGB yields surge on momentum for fiscal expansionists

    Daiwa's View - JGB yields surge on momentum for fiscal expansionists

    15 July 2025 689 KB PDF
    • Latest opinion polls clearly show that ruling parties in danger of losing their majority; super-long JGB yields surged roughly 10bp
    • With fiscal expansionist parties (DPP, Sanseito) gaining ground, JGB market pricing in retreat from fiscal discipline
  • Economic Commentary - Opinion Survey: Interpreting underlying inflation rates and consumer sentiment

    Economic Commentary - Opinion Survey: Interpreting underlying inflation rates and consumer sentiment

    14 July 2025 525 KB PDF
    • Inflation putting pressure on livelihoods amid rising household inflation expectations
    • Consumer sentiment is deteriorating, but that might not be factoring in decline in rice prices
    • FY25 price projection at Jul BOJ MPM expected to be raised, but economic projection will likely be lowered
  • Daiwa's Economic View - Ruling LDP/Komeito could expand coalition after Upper House election

    Daiwa's Economic View - Ruling LDP/Komeito could expand coalition after Upper House election

    11 July 2025 452 KB PDF
    • Expanded coalition possible if LDP/Komeito fail to secure majority in Upper House
    • DPP, other parties seen as potential new coalition partners according to media reports, others
    • Upward pressure on JGB yields may increase, but focus to then shift to effectiveness of policies vs election pledges
  • Daiwa's View - USD-denominated super-long JGB yields

    Daiwa's View - USD-denominated super-long JGB yields

    10 July 2025 425 KB PDF
    • Super-long JGB yields rose significantly to around 3.0%, but generally valued as fair from global balance perspective
    • Meanwhile, BOJ’s low policy interest rate stands out globally, making carry & roll-down returns on super-long JGBs very attractive
    • Once market volatility subsides, both domestic and foreign investors likely to focus more on this investment appeal