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2026
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Daiwa's View - Surging 10-year JGB yield: Fiscal “free lunch” is over
18 May 2026
451 KB
PDF
21bp increase over past week marks biggest 10yr JGB yield jump in 23 years
Arising fiscal concerns due to supplementary budget considerations
Domar condition deteriorating due to rising 10yr JGB yield and end of fiscal “free lunch”
Despite no major changes to our 10yr JGB yield outlook, see risk of higher-than-expected upside
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Economic Commentary - Considering early supplementary budget scale and funding
15 May 2026
361 KB
PDF
Cabinet decision on supplementary budget likely around mid-June; Expect small scale of around Y4.0tn
Most funding from deficit-financing bonds; JGB issuance plan may avoid increased issuance of coupon-bearing JGBs
Fiscal deterioration concerns may temporarily intensify, but could later subsid
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Daiwa Memorandum - Previewing BOJ's interim assessment of JGB purchases
14 May 2026
593 KB
PDF
BOJ to keep planned JGB purchase reductions through March 2027
Expect BOJ to cut monthly purchases by Y100bn per quarter from April 2027
BOJ JGB holdings, current account balances pose no obstacle to further reductions
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Daiwa's View - BOJ shifting from steady-paced rate hikes to event-driven approach
13 May 2026
456 KB
PDF
Economic resilience maintained even under supply constraints amid materialization of upside risks to prices
Shift in policy conduct premised on continued rate hikes and move towards an event-driven approach
Distance to the neutral rate and a more flexible rate-hike path (implications of front-loading and acceleration)
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FX Pulse - Summary of key issues regarding forex intervention
11 May 2026
634 KB
PDF
Will the BOJ raise interest rates?
Securing resources for consumption tax cut as underlying motive?
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Daiwa Memorandum - Overseas yield decline affects superlong JGB yields
8 May 2026
706 KB
PDF
No significant change in market pricing for BoJ rate hikes even after holidays
Overseas superlong yields show signs of stabilizing, albeit at high levels
30-year JGB yield above 4% remains a risk scenario
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Daiwa's View - Stagflation risk and central bank credibility
7 May 2026
745 KB
PDF
Impact of currency intervention on Japanese interest rates
Stagflation: Three conditions and the current state of Japan’s economy
Outlook for a June rate hike
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Daiwa's Economic View - Policy decisions following “Central Bank Week”: Crude oil, supply constraints, and forex intervention
1 May 2026
467 KB
PDF
“June divergence” scenario for major central banks
Uncertainties about crude oil, supply chain scenarios
Financial situation (including forex) and BOJ conditions
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