Jonathan Fortun’s research and commentary on Japan’s economy, the yen, government bonds and the international effects of monetary policy.
Japan connects domestic monetary choices with financial markets far beyond its borders. My work examines how interest rates, inflation, wages and public finances interact with the yen and Japanese government bonds. The question is not only where the policy rate goes, but how a change in the monetary regime reaches investors, households and international markets.
Government bond yields offer one way into that question. Central bank purchases, demand from domestic institutions and participation by foreign investors shape the market together. Reading those changes alongside fiscal constraints and inflation helps distinguish shifts in bond pricing from broader pressures on the economy.
The yen provides another connection to the global system. Currency valuation, intervention and investment income link Japan’s domestic economy to international capital allocation. The research and commentary collected here examine those mechanisms through published IIF analysis and public conversations, with the date and context of each assessment preserved.
Jonathan Fortun / Institute of International Finance
Takaichi’s electoral landslide strengthens the ability to implement policy without removing Japan’s economic constraints. Stalled fiscal consolidation, weak domestic monetary transmission and trade frictions in autos limit the available options. Government bond yields and the yen increasingly reflect those fiscal and policy limits, making interest rate differentials alone an incomplete guide to market behavior.
Jonathan Fortun / Institute of International Finance
Rising Japanese government bond yields in May 2025 reflect monetary normalization, inflation expectations and term premiums in this assessment. A stronger yen, contained credit risk measures and solid auctions support that reading. Private investors absorb supply as the central bank steps back, suggesting an adjustment in market pricing rather than a loss of fiscal confidence.
Jonathan Fortun / Institute of International Finance
The May 2025 Japan outlook forecasts growth of 1.2 percent in 2025 and 0.7 percent in 2026, with a temporary contraction as trade frictions meet softer consumption. Services and employment offer some resilience despite manufacturing weakness. Firm wages support gradual monetary normalization, while limited fiscal room constrains the response to slower activity.
Marcello Estevão · Jonathan Fortun / Institute of International Finance
Japan's 2025 outlook balances a recovery in household demand against inflation and external risks. Wage gains support consumption, while yen depreciation complicates monetary normalization. The December 2024 assessment also examines exposure to US tariffs, geopolitical uncertainty and investment in automation, green technology and infrastructure.
Fortun discusses how new borrowing by South Korea, Turkey and Mexico supported July portfolio inflows into emerging markets. He also considers how prospective US monetary easing and the unwinding of yen-funded carry trades could affect demand.
Jonathan Fortun / Institute of International Finance
Ending Japan's extraordinary monetary easing marked a turning point, but full normalization remained distant in April 2024. The Bank of Japan's large government bond holdings and the market effects of yield curve control complicated the transition. Reducing that footprint gradually carried implications for the yen and public finances.
Jonathan Fortun / Institute of International Finance
Cooling inflation complicated the timing of Japan's exit from yield curve control in early 2024. Wage negotiations were central to establishing a firmer basis for policy normalization. The February assessment retained an expectation of an exit by July, while recognizing that Governor Ueda's communication could alter the timetable.