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2025

2024

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  • Daiwa's View - Is there really a risk of JGB yields rising sharply due to BOJ’s QT?

    Daiwa's View - Is there really a risk of JGB yields rising sharply due to BOJ’s QT?

    1 July 2025 742 KB PDF
    • Market factoring in stock effect drop off; real issue is 95% increase in JGB private-sector holdings
    • Foreign investor participation as backstop for rising JGB yields
  • Daiwa's Economic View - Upper House election and fiscal policy outlook following Tokyo Assembly election

    Daiwa's Economic View - Upper House election and fiscal policy outlook following Tokyo Assembly election

    1 July 2025 497 KB PDF
    • LDP/Komeito lost significant number of seats in Tokyo Metropolitan Assembly election
    • Ruling parties facing tough battle in Upper House election as well with focus on whether they can maintain majority (including uncontested seats)
    • If majority is maintained, Ishiba administration will remain in power and continue pursuing fiscal consolidation; if ruling parties lose their majority, they may consider expanding coalition or changing policies
  • Daiwa's Economic View - June Tankan: Little downward pressure on firms, prolonged uncertainty a concern

    Daiwa's Economic View - June Tankan: Little downward pressure on firms, prolonged uncertainty a concern

    1 July 2025 498 KB PDF
    • Unexpected improvement for manufacturers; limited negative impact on corporate sentiment
    • Implies steady progress toward BOJ's 2% price stability target
    • Should make BOJ more confident about raising rates, but likely to stay cautious given prolonged uncertainty
  • Economic Commentary - June Tokyo CPI: Wave of cost pass-throughs may be easing

    Economic Commentary - June Tokyo CPI: Wave of cost pass-throughs may be easing

    27 June 2025 510 KB PDF
    • Inflation slowed in June, mainly on policy factors
    • Wave of cost pass-throughs may be easing
    • Services inflation mainly reflects pass-through of rising goods costs
  • Daiwa's View - Speed of QT and importance of balancing JGB issuance and purchases

    Daiwa's View - Speed of QT and importance of balancing JGB issuance and purchases

    27 June 2025 433 KB PDF
    • Among JGBs currently held by BOJ, about 30% (Y163tn) will be redeemed within next two years and roughly 50% (Y273tn) will be redeemed within four years
    • When BOJ redeems its JGBs, private sector holdings of JGBs will increase through refinancing by MOF; balance between issuance and purchase maturities over next few years will be significant from perspective of interest rate risk
  • Daiwa's Economic View - BOJ June MPM Summary of Opinions

    Daiwa's Economic View - BOJ June MPM Summary of Opinions

    26 June 2025 537 KB PDF
    • Consensus is to watch and wait amid ongoing uncertainty
    • May take until after summer to assess state of real economy
    • But BOJ emphasizes upside risks to inflation
    • Key focus at July MPM: Comments on balance of risks to economy/inflation
  • Daiwa's View - Unexpected plan to reduce issuance of 20-year JGBs

    Daiwa's View - Unexpected plan to reduce issuance of 20-year JGBs

    23 June 2025 406 KB PDF
    • Contrary to media reports on 19 Jun, issuance of 20-year JGBs to be reduced by Y200bn/auction starting Jul
    • This, together with June BOJ MPM, makes it clearer the care and consideration authorities are giving to 20-year sector
    • Probably aiming to use 20-year sector as bulwark to prevent turmoil in 30- and 40-year yields from spreading to intermediate/long-term sectors
  • Daiwa's View - May price indices in Japan and US confirmed a situation roughly in line with optimal tariff theory

    Daiwa's View - May price indices in Japan and US confirmed a situation roughly in line with optimal tariff theory

    12 June 2025 406 KB PDF
    • While impact of tariffs on US CPI was smaller than expected, BOJ’s Corporate Goods Price Index revealed that Japanese firms are absorbing tariff costs through price reductions
    • The situation is roughly in line with optimal tariff theory, and, if this trend continues, negative impact of tariff policies on US economy may be much smaller than economists expected
    • Meanwhile, as this theory implies greater downward pressure on exporting nations than projected, it may constrain additional rate hikes by BOJ