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31 December 2024

Home / White Papers 2022

Awakening Japan’s Sleeping Giant

by Carol Lye, Associate Portfolio Manager & Senior Research Analyst

Since its start, 2022 has been a volatile year for global bond yields. Inflation concerns and central banks seeking to play catch-up have been top of mind for investors, sending yields higher. German bunds broke above 0% on February 2; U.S. 10-Year Treasury bonds topped 2% on February 15. Japanese government bonds (JGBs) also have not been spared. Since mid-January, 10-year JGBs have risen alongside global bond yields, nearing the top of the Bank of Japan’s (BOJ) yield curve control (YCC) band target of 0.25%. The super-long, 30-year end of the JGB curve jumped close to 30 basis points (bps) to reach almost 1% in a span of two weeks. Even with the sharp increase in global uncertainty and geopolitical risks stemming from the conflict in Ukraine, JGB yields remain higher than at the start of the year...

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