By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
IndebtaIndebta
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
9
Notification Show More
News
LVMH’s Loro Piana placed under court administration over worker exploitation
50 minutes ago
News
Donald Trump threatens 100% secondary tariffs on Russia
2 hours ago
News
Warren Buffett comes out on top from Kraft Heinz flop
3 hours ago
News
Ukraine hits back after top agent assassinated in Kyiv
4 hours ago
News
Volodymyr Zelenskyy nominates new Ukraine PM in major reshuffle
5 hours ago
News
Pensioners versus the new ‘masters of the universe’
6 hours ago
News
Bitcoin hits $120,000 milestone as US Congress readies for ‘crypto week’
7 hours ago
News
EU warns Trump’s 30% tariffs would eliminate transatlantic trade
8 hours ago
News
European stocks slip after Donald Trump’s tariff threat
9 hours ago
Aa
IndebtaIndebta
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
Indebta > News > Pimco bets on long-term Japanese debt in ‘dislocated’ market
News

Pimco bets on long-term Japanese debt in ‘dislocated’ market

News Room
Last updated: 2025/06/22 at 12:29 AM
By News Room
Share
5 Min Read
SHARE

Stay informed with free updates

Simply sign up to the Sovereign bonds myFT Digest — delivered directly to your inbox.

Bond giant Pimco has been buying long-term Japanese government debt to take advantage of what its global fixed income chief Andrew Balls called a “dislocation” in the market.

Japanese government bonds have been hit hard in recent months as a resurgence in inflation and a decline in demand from traditional domestic buyers transforms the market. That has taken yields on long-dated debt to record levels and prompted authorities to consider measures to support bond prices.

“When you look at the Japanese curve, it looks dislocated,” Balls, Pimco’s CIO for global fixed income, told the Financial Times. “In some of our portfolios, we’ve bought the long end of the Japanese curve because you can see the potential, there’s a trading opportunity.” 

The manager, an arm of Germany’s Allianz, has bet on 30-year Japanese sovereign debt, whose yield surged above 3 per cent in May. That has meant a significant fall in the price of the debt that spent much of the past decade with a yield below 1 per cent during Japan’s negative interest rate era. 

Japan’s bond sell-off, which has been more pronounced than the decline in other big markets, has prompted the Bank of Japan to say this week it will move more slowly to cut back its bond purchases, while Japan’s finance ministry has been consulting bond-trading banks about whether it should scale back issuance of long-term debt.

On Friday, Japan’s finance ministry discussed with banks a plan to cut issuance of super long bonds by a total of ¥3.2tn ($22bn) during the current fiscal year to March.

It is highly unusual for the government to change its issuance plans midway through a fiscal year, without a change in the budget. The potential move reflected elevated anxiety within the government over the bond market, said strategists in Tokyo.

The proposed reduction of issuance was more severe than officials had previously indicated, and will be applied to 20-, 30- and 40-year Japanese government bond tenors, offset by a boost to issuance of short-term debt.

Speaking before the meeting, Balls said there was a “strong case” for Japanese authorities to “issue more in the parts of the curve where the demand is”, given the declining demand for long-term debt from Japan’s life insurers. He said his view on issuance had been strengthened by the market fallout from Donald Trump’s “liberation day” tariff announcement, which sent borrowing costs higher around the world.

Japan’s challenge is shared by other big economies such as the UK and the US as they face growing pushback from the market on the terms of their long-term borrowing. The UK is already shortening the maturity its debt issuance, given declining demand for long-dated bonds in particular. Despite their sharp rise, Japan’s borrowing costs are still well below those in other big economies, with the US 30-year bond yield at about 4.9 per cent.

Pimco’s Balls said there was a limit to how high global long-term borrowing costs could go before they started “feeding back” in equity and credit market volatility. That could then lead to central banks “having to react”, he added, pulling policy rates lower and supporting bond prices.

Fuelling the sell-off in long-dated Japanese debt has been a run of poorly received bond auctions as analysts point to a so-called “buyers’ strike” by life insurers and other domestic investors that have been forced by shifting economic circumstances to change their buying strategies. 

Concerns are also running high that a highly challenging Upper House election scheduled for next month could result in all parties pledging schemes that would ratchet up fiscal spending.

Koichi Sugisaki, a rates strategist at Morgan Stanley MUFG, said that falling demand from traditional domestic Japanese investors may leave a greater role to be played by overseas investors.

“[That] can hardly be considered good for market stability, given that such investors are known for being comparatively quick to take profits or cut losses when interest rates move,” wrote Sugisaki in a note to investors.

Read the full article here

News Room June 22, 2025 June 22, 2025
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
LVMH’s Loro Piana placed under court administration over worker exploitation

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

Donald Trump threatens 100% secondary tariffs on Russia

Unlock the White House Watch newsletter for freeYour guide to what Trump’s…

Warren Buffett comes out on top from Kraft Heinz flop

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

Ukraine hits back after top agent assassinated in Kyiv

Stay informed with free updatesSimply sign up to the War in Ukraine…

Volodymyr Zelenskyy nominates new Ukraine PM in major reshuffle

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

- Advertisement -
Ad imageAd image

You Might Also Like

News

LVMH’s Loro Piana placed under court administration over worker exploitation

By News Room
News

Donald Trump threatens 100% secondary tariffs on Russia

By News Room
News

Warren Buffett comes out on top from Kraft Heinz flop

By News Room
News

Ukraine hits back after top agent assassinated in Kyiv

By News Room
News

Volodymyr Zelenskyy nominates new Ukraine PM in major reshuffle

By News Room
News

Pensioners versus the new ‘masters of the universe’

By News Room
News

Bitcoin hits $120,000 milestone as US Congress readies for ‘crypto week’

By News Room
News

EU warns Trump’s 30% tariffs would eliminate transatlantic trade

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?