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Long End JGBs Looking for Ueda Protection from Takaichi Stimulus

ADMIN || 23rd January 2026

JGB traders will be hoping that Governor Ueda springs a surprise today and hints the BOJ will increase purchases of super long bonds to stabilize the yield curve, especially with the risks imposed by Takaichi’s stimulus plans.

While today’s BOJ policy meeting is expected to be unexciting with no change of interest rates, investors will be glued to Ueda’s press conference hoping there is verbal support for JGBs. Given that Japanese bonds are showing signs of disorderly behaviour, which is an opening for the central bank to step in.

Under Ueda’s rein the central bank is gradually reducing purchases of JGBs, with a plan to continue doing so into 2027. However, this environment may be categorized as an emergency when just $280 million worth of transactions on a day can send long-term yields soaring, just the hook needed for the BOJ to tweak its JGB buying to favor super-long debt.

Meanwhile, some traders are already speculating about changes to the GPIF mandate which would shift funds back to the domestic markets from overseas. That would likely be positive but may need a longer timeline to be realized. At least Ueda could trigger support in the interim in a carefully worded press conference.

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