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Fixed Income Commentary

Will bond market concerns about "responsible proactive fiscal policy" fade over time?

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JSDA bond transaction data by investor category (July 2026)      

Key points
  • JGB market is growing increasingly concerned about FY27 budget, first for which Takaichi administration is fully responsible

  • Cabinet Office estimates and government's core fiscal management objective suggest that excessive increases in spending and JGB issuance may be avoided in FY27

  • That could put market participants at ease, but concerns about feasibility of government's growth scenario are likely to persist

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