HSBC Maintains Moderately Bearish View on Japanese Government Bonds

HSBC maintained its moderately bearish view on Japanese government bonds. According to Jin10, Asia-Pacific rates strategist Justin Heng said the focus on Japanese rates is mainly on statements by the prime minister and finance minister, which suggest the government is seeking ways to encourage pension funds and retail investors to buy more Japanese government bonds. Heng said measures such as adjusting the Government Pension Investment Fund's strategic asset allocation may take time to coordinate and approve, and these changes could be implemented as early as 2027. He added that the firm's base case remains higher yields in the near term. The 10-year Japanese government bond yield rose 3 basis points to 2.765% at the time of reporting.