JGBS Japanese Government Bonds Loading... : Bullish and Bearish Analyst Opinions
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11:26
Sep 01
Sep 01
Japanese stocks take JGB outflows
Japanese equities are shrugging off the JGB selloff, attracting flows as a comfortable place versus Japanese government bonds, which suffer from poor fundamentals, lack of fiscal discipline, and no plan to rein in borrowing.
MED
05:02
Sep 01
Sep 01
Weak JGB auctions threaten global bond duration.
The upcoming 10-year JGB auction is a major risk for duration; following a weak 2-year auction, tepid demand for the 10-year would be a negative sign for global duration and push US yields even higher.
HIGH
04:16
Aug 28
Aug 28
Long-end Treasury yields face upward pressure.
Long-end US Treasury yields will face upward pressure due to uncontained fiscal deficits and potential negative spillover from upcoming 30-year JGB auctions, prompting traders to position nimbly.
MED
07:01
Aug 26
Aug 26
Upcoming auctions and BOJ hikes pressure JGBs.
Japanese Government Bonds are likely to weaken next week due to upcoming 10-year and 30-year auctions pricing in a concession, combined with pressure on the Bank of Japan to raise interest rates in September.
MED
15:03
Aug 17
Aug 17
The BOJ cannot control rising bond yields.
The Bank of Japan is running out of options to control the bond market, and with expansionary fiscal policy, managing yields is slipping out of their control.
HIGH
14:44
Aug 17
Aug 17
Global long-end yields drift higher.
The long end of global sovereign bond curves is under upward pressure from international spillovers: Major points to JGBs currently and notes that a few weeks ago the same dynamic could have been visible in gilts, bunds or Australian government bonds, describing a drip-drip higher in long-end yields.
MED
12:53
Aug 17
Aug 17
JGB long end under global spillover
The long end of the JGB curve is currently feeling an international spillover effect, part of the same global process that previously affected gilts, bunds, and Australian bonds, keeping upward pressure on long-end yields.
MED
13:21
Aug 13
Aug 13
Low rates will pressure Yen and JGBs.
The Bank of Japan is shortchanging bondholders by keeping rates artificially low while inflation persists; until the BOJ raises rates successively, neither the Yen nor JGBs will find respite.
HIGH
09:45
Jun 02
Jun 02
Short JGBs on BOJ tightening.
Japan is an inflection point. The Bank of Japan is behind the curve and we think they need to increase rates once or twice. This creates a repricing opportunity in the Japanese bond market.
MED
07:15
May 25
May 25
JGB respite temporary, yields to rise.
The recent respite in JGBs is temporary. The Bank of Japan is fundamentally behind the curve, with inflation averaging 2.5-2.8% this fiscal year while the policy rate is below 1%. The Taylor rule suggests a rate of 2.8-3%, creating a huge gap. JGBs trade at a 25-40 basis point discount to US Treasuries after swapping cash flows, indicating the market expects the BOJ to hike. The rally based on hopes of an Iran deal is unlikely to last; even if a deal is reached, the backlog in the Strait of Hormuz will keep inflation elevated. Therefore, JGB yields should rise significantly.
HIGH
04:03
Mar 20
Mar 20
Rodda states Japanese assets look poised for more downside, citing the risk of the BOJ repeating a past mistake of keeping policy too loose during a supply shock, leading to equity underperformance, bond underperformance, and currency depreciation. Japan is heavily exposed to the energy shock, which is inflationary. If the BOJ looks through this shock and maintains loose policy, history suggests it will result in weak currency (JPY), weak bonds (JGBs), and weak equities (Nikkei). AVOID. The fundamentals suggest a bearish outlook for JPY and JGBs as the energy crisis plays out, with risks skewed to the downside. The BOJ surprises with a decisive hawkish turn to combat inflation, supporting the Yen and JGB yields.
22:04
Jan 21
Jan 21
1. THE FACT: The MoF can use its coupon income on its Treasuries creatively and fund some.
1. THE FACT: The MoF can use its coupon income on its Treasuries creatively and fund some buybacks, and/or realize some of the capital gain on Treasuries bought when the yen was 80.
2. THE BRIDGE: This provides a mechanism for the MoF to support JGBs through buybacks.
3. THE VERDICT: MoF's ability to use Treasury income for JGB buybacks supports a long position.
03:00
Jan 21
Jan 21
1. THE FACT: The speaker believes Japan will turn Postbank back into a captive source of demand.
1. THE FACT: The speaker believes Japan will turn Postbank back into a captive source of demand for JGBs, GPIF will reallocate back into JGBs (at a massive profit), and MoF will reduce its FX reserves relative to GDP.
2. THE BRIDGE: These actions would create demand for JGBs and have a "100% different impact on the yen" (implying strengthening).
3. THE VERDICT: Institutional shifts in Japan will create demand for JGBs and strengthen the JPY.
15:38
Jan 20
Jan 20
1. THE FACT: The market is worried about JGBs, potentially due to fiscal concerns or a risk.
1. THE FACT: The market is worried about JGBs, potentially due to fiscal concerns or a risk of moving into a "self-reinforcing bad equilibrium."
2. THE BRIDGE: This implies a potential for JGBs to underperform if these concerns materialize, despite Japan's foreign asset position and natural bid from lifers (tweet 4).
3. THE VERDICT: Monitor JGBs for signs of a "bad equilibrium" or increasing fiscal concerns, which could lead to a sell-off.
15:37
Jan 20
Jan 20
1. THE FACT: Domestic institutional investors (lifers) are not buying JGBs due to past losses.
1. THE FACT: Domestic institutional investors (lifers) are not buying JGBs due to past losses and low rates. GPIF's asset allocation is locked.
2. THE BRIDGE: This suggests a lack of natural domestic demand for JGBs, which could lead to price instability or require other buyers to step in. The market is "worried" (tweet 1).
3. THE VERDICT: Monitor JGBs for potential weakness due to a lack of domestic institutional buying interest.
16:41
Dec 22
Dec 22
1. THE FACT: "And there is a bit too much negativity around Japan's fiscal ...
1. THE FACT: "And there is a bit too much negativity around Japan's fiscal ... real rates are negative at the relevant tenors for funding the government, and the aggregate fiscal deficit (general government, IMF definition) is WAY better than the US ..."
2. THE BRIDGE: The market's negative perception of Japan's fiscal situation is unwarranted given negative real rates and a significantly better fiscal deficit compared to the US. This suggests that JPY and JGBs are undervalued relative to their fiscal fundamentals, presenting a buying opportunity.
3. THE VERDICT: Japan's fiscal situation is better than perceived, with negative real rates and a stronger deficit than the US, supporting JPY and JGBs.
16:32
Dec 22
Dec 22
1. THE FACT: "Looks like Japan's Ministry of Finance is getting ready to realize some of its.
1. THE FACT: "Looks like Japan's Ministry of Finance is getting ready to realize some of its massive profits, selling dollars bought at 80-100 at well over 150 ... and in the process reducing Japan's debt (Japan carries its reserves on the MoF's balance sheet)"
2. THE BRIDGE: The potential for Japan's Ministry of Finance to sell significant dollar reserves (bought at much lower JPY/USD rates) implies a large-scale intervention to strengthen the JPY. This action would also reduce Japan's debt, further supporting the JPY and potentially JGBs.
3. THE VERDICT: Japan's MoF may sell dollars to realize profits and reduce debt, which would strengthen the JPY and potentially JGBs.
About JGBS Analyst Coverage
Buzzberg tracks JGBS (Japanese Government Bonds) across 2 sources. 1 bullish vs 5 bearish calls from 9 analysts. Sentiment: mixed to bearish. 17 total trade ideas tracked. Past 7 days: 3 watch. Latest voices: Anthony Stevens, Ruth Carson, Mark Cranfield.