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Morgan Stanley: Japan's 10-year government bond yield is expected to retreat by the end of the year

Morgan Stanley: Japan's 10-year government bond yield is expected to retreat by the end of the year

金十金十2026/05/18 05:28
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```htmlGolden Ten Data reported on May 18 that Morgan Stanley rate strategists stated in a report that as market focus shifts from inflation to economic growth, the mid-segment of the Japanese government bond yield curve is expected to outperform other maturities. They anticipate that the 10-year Japanese government bond yield will decline to 2.1% by Q4 2026; according to London Stock Exchange Group data, the current yield is 2.74%. The strategists believe that due to a lack of domestic investor demand, the long end of the yield curve will continue to lag. They noted that the policy path implied by current market pricing for the Bank of Japan is more hawkish than both Morgan Stanley’s subjectively probability-weighted policy path and survey-based forecasts, which indicates a substantial inflation risk premium in the market. “We expect this premium to dissipate by Q4 2026, pulling the 10-year Japanese government bond yield down to 2.10%. Subsequently, as oil prices stabilize and the Bank of Japan resumes raising interest rates, the yield will gradually rise, reaching 2.30% by Q4 2027.”```
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