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JGB yield and yield curve scenarios for January and 2026
Long-term and super-long-term JGB yield scenario for January 2026
Long-term and super-long-term JGB yield scenario for January 2026
The 10-year JGB yield forms a new trading range around 2.0% in January. We anticipate dip-buying from reassured investors in the wake of the BoJ decision to raise rates at the December Monetary Policy Meeting and the release of the JGB issuance plan for FY26. The debt issuance plan calls for a reduction in super-long issuance while keeping the supply of 10-year bonds unchanged, and expectations of improved supply/demand are expected to be supportive for JGBs, especially in the super-long sector. But after the accelerated rise in yields starting in mid-November, any retracements are likely to prompt relief selling or position adjustments ahead of the fiscal year-end, thus limiting the downside for yields. The10-year JGB yield may find support if speculation of a more hawkish BoJ stance picks up ahead of the January 22-23 MPM. Investors will also be watching the nomination of a replacement for Policy Board member Asahi Noguchi, which the prime minister may submit to the Diet as early as late January. Should Prime Minister Sanae Takaichi appoint a proponent of reflationary policies or “high-pressure economy” to serve on the Board, it could be perceived as an attempt to discourage further rate hikes, putting bear-steepening pressure on the yield curve by amplifying concerns that the central bank will fall behind the curve. Conversely, the nomination of a more neutral candidate would support the view that the selection will have little influence on the next rate hike decision.