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2025

2024

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  • 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
  • Daiwa's Economic View - Tokyo CPI for May: Sticky inflation?

    Daiwa's Economic View - Tokyo CPI for May: Sticky inflation?

    30 May 2025 483 KB PDF
    • Progress passing on higher costs to prices for goods/services
    • With cost-push pressures easing, focus on how long passing on higher costs to prices will continue
    • Electricity/gas subsidies to place roughly 0.3% drag on CPI in Aug-Oct
    • Even though price decline from release of stockpiled rice limited, still see drag of about 0.2% on CPI
  • Daiwa's View - How far will superlong JGB yields fall?

    Daiwa's View - How far will superlong JGB yields fall?

    28 May 2025 865 KB PDF
    • MOF's cut to superlong issuance could drive down 30-year yield to 2.5-2.7%
    • Review of issuance midway through fiscal year unusual; likely game-changer for superlong JGB market
  • Daiwa's View - What lies ahead regarding a reduction to the consumption tax?: Impact on Japan's sovereign ratings

    Daiwa's View - What lies ahead regarding a reduction to the consumption tax?: Impact on Japan's sovereign ratings

    22 May 2025 333 KB PDF
    • If consumption tax were cut, downward pressure would likely be exerted on Japan’s sovereign ratings
    • Whether it would actually lead to downgrade depends on scale and period of tax cut; S&P would likely emphasize balance with fundamentals
    • Full-fledged debate expected from autumn until year-end; our main scenario is that a downgrade would be avoided
  • Daiwa's View - BOJ's Bond Market Group meetings (Day 1)

    Daiwa's View - BOJ's Bond Market Group meetings (Day 1)

    21 May 2025 641 KB PDF
    • JGB purchasing reduction plan through Mar 2026 likely to maintain current pace
    • Sense somewhat strong possibility of JGB purchases slowing to around Y200bn from Apr 2026
    • In order to proceed with “reduced JGB purchasing operations” while ensuring that market participants maintain predictability, must have broad-view discussions on “excess reserves to target over long term” (equivalent to appropriate balance sheet size)
  • Daiwa's View - Outlook for JGB yields

    Daiwa's View - Outlook for JGB yields

    20 May 2025 694 KB PDF
    • We have raised our 10-year yield forecast for end-FY25 to 1.65% due to progress with US-China trade talks
    • Yields are likely to be pushed up by the expected terminal rate and widening of term premium
  • Daiwa's View - Moody’s downgraded US credit rating to Aa1

    Daiwa's View - Moody’s downgraded US credit rating to Aa1

    19 May 2025 739 KB PDF
    • We need to carefully watch for possible wide-ranging impact, because, while the downgrade may tend to lead us to think about a higher term premium, the impact of a sovereign downgrade is not as simple as a corporate bond downgrade
    • Impact on short-term/intermediate JGB zone will probably be limited
    • Market valuation of Japan is currently higher than that of France, but if Japan’s valuation were to fall to the same level as France, yields could rise by about 15bp in superlong zone
  • Daiwa's Economic View - Jan-Mar 2025 GDP

    Daiwa's Economic View - Jan-Mar 2025 GDP

    16 May 2025 495 KB PDF
    • Economy shrank on worsening external demand
    • Currently see moderate recovery, but economy not particularly strong before tariffs and significant downside risk going forward
    • Virtuous cycle of “higher wages to higher prices” stalling for now due to Trump tariffs