About this work
A changing investor base is adding pressure to Japan's longest bonds as the Bank of Japan reduces its purchases. Weaker demand from life insurers and greater foreign participation make yields more sensitive to global bond-market conditions, even after reductions in super-long issuance. Stabilizing long-term borrowing costs may therefore require domestic demand, changes in issuance maturities or direct bond-market measures alongside decisions about the policy rate.
Cite this work
Jonathan Fortun (2026). IIF Asia Economic Views: Japan’s Long Bonds Are Testing the Limits of the Policy Rate. Institute of International Finance.