According to the Bank of America Securities report, the yield on 10-year Japanese Treasury bonds is expected to rise to 2% by the end of 2026 due to wage growth, fiscal expansion, and interest rate hikes by the Bank of Japan. In view of expectations of a net increase in the supply of Japanese treasury bonds, strategists such as Shusuke Yamada suggest maintaining short interest spreads and prefer steeper yield curve reports that the Bank of Japan continues to reduce quantitative easing and the government increase fiscal spending will “boost the net supply of Japanese treasury bonds, while domestic demand — mainly from pension funds — is still insufficient to absorb the new supply. According to the report, this imbalance requires the participation of price-sensitive investors, “making ultra-long contracts particularly vulnerable to upward pressure on yield.” Although the market generally predicts that Japan's inflation will slow down next year, strategists suggest increasing the 10-year Japanese inflation index bonds because these bonds can bring positive returns, and continued wage inflation may drive them up.

According to the Bank of America Securities report, the yield on 10-year Japanese Treasury bonds is expected to rise to 2% by the end of 2026 due to wage growth, fiscal expansion, and interest rate hikes by the Bank of Japan. In view of expectations of a net increase in the supply of Japanese treasury bonds, strategists such as Shusuke Yamada suggest maintaining short interest spreads and prefer steeper yield curve reports that the Bank of Japan continues to reduce quantitative easing and the government increase fiscal spending will “boost the net supply of Japanese treasury bonds, while domestic demand — mainly from pension funds — is still insufficient to absorb the new supply. According to the report, this imbalance requires the participation of price-sensitive investors, “making ultra-long contracts particularly vulnerable to upward pressure on yield.” Although the market generally predicts that Japan's inflation will slow down next year, strategists suggest increasing the 10-year Japanese inflation index bonds because these bonds can bring positive returns, and continued wage inflation may drive them up.