供应负担沉重的超长期债券：超长期债券收益率飙升反映出国内私营部门需求的结构性短缺，这使得人们将注意力转向官方回应（特别是减少3 - 6万亿日元的发行量）和外国投资者。超长期债券可能仍将面临脆弱的供求关系，不过调整可能会刺激回购。

Restricted - External Shinichiro Kadota+81 3 4530 1374shinichiro.kadota2@barclays.comBSJL, JapanAyao Ehara+ 81 3 4530 1379ayao.ehara@barclays.comBSJL, Japan FIGURE 1. Superlong forward trades(2010) - a comparison of JGBs,FIGURE 2. Risk-adjusted carry-rolldown by sector0246810121416Jan-24Apr-24Jul-24Oct-24Jan-25Apr-252y5y10y20y30y40ySource: Bloomberg, Barclays ResearchBunds and rapidly approaching that of US Treasuries (Figure 1). In this context, the 20y auctionon 20 May produced a lowest accepted price of 98.15, sharply undershooting the 99.80 marketconsensus, with a tail of 1.14 yen, the longest since 1987, and the lowest bid-cover since 2012,reconfirming the weakness of superlong supply and demand.Position adjustments and a structural lack of demand are the main drivers of weakness inthe superlong sector. As noted in the materials of the BoJ’s “Bond Market Group” (released on20 May), 1) ASW and flattener unwinds since the UStariffpolicy announcement have, 2)together with structural changes in the form of waning life insurer demand, substantiallyworsened the superlong bond supply-demand profile. First, increase in market volatility thatfollowed the UStariffpolicy announcement has likely triggered position adjustments anddespite the rise in superlong yields, risk-adjusted carry-rolldown pales in comparison with the10y-and-shorter sector (Figure 2). Also, the 30y swap spread is trading around -60 to -80bp,cheapening substantially from the pre-Apriltariffrange of -40 to -50bp, even approaching USsuperlong swap spreads.Second, life insurers have already virtually finished closing their ALM duration gaps (viasuperlong JGB investment) to meet new regulations (economic solvency ratios) introduced atthe start of this fiscal year.Afterbuying superlong bonds at a scale sharply exceeding netpremium income in the years through FY23, driven by this special regulatory demand, lifeinsurers then slowed their purchases to a level commensurate with such income in FY24 (Figure3). Looking at monthly flows, life insurer purchases of superlong bonds have dropped to aroundzero as a trend since H2 FY24 (Figure 4). As JSDA statistics do not include redemptions, a zeronet purchase indicates a decline in holdings.Going forward as well, FY25 life insurer investment plans indicate that many of the largest firmsare looking to reduce their holdings in the current fiscal yearafterhaving largely met theirregulatory ALM demand by March 2024. Many are planning to switch from low- to high-yieldingbonds, leavingoff-the-runissues vulnerable to selling pressure.2 Source: Bloomberg, Barclays Research22 May 2025 FIGURE 6. Yen rates risk on banks1011 12 13 14 15 16 17 18 19 20 21 22 23 24 2505101520253035141516171819202122232425Large banksRegional banksShinkin banks100bpv/capital%Source: BoJ, Barclays ResearchDemand is tepid among other investors as well, with the GPIF refraining from changes to itsasset allocations during the latest review and banks facing narrower loan-deposit gaps anddeclining deposit liability duration. In FY24, net purchases came to only around JPY12trn (seeDeposit and JGB investment trends during rate-hike phases, 31 March). According to the BoJ’slatest Financial System Report (FSR, April 2025), some regional financial institutions areincreasing their held-to-maturity balances, but the yen interest rate risk at banks overall isbeing held down through the suppression of JGB duration risk and the utilization of hedgesinvolving interest rate swaps/bear funds, suggesting ample capacity to absorb losses (Figure 6).Asset/liability interest rate risk in banking accounts is also balanced overall (Figure 7).In addition to structurally weak supply and demand, long-term fiscal concerns are likelyalso contributing.Specifically, defense spending increases and fiscal stimulus such asconsumption tax reductions have come into focus. First, the US is urging Japan to increase itsdefense spending. During a hearing of the Senate armed services committee in March, USDefense Undersecretary Colby called on Japan toliftdefense spending to at least 3% of GDP(NHK, 5 March). On 15 April, Japanese Defense Minister Nakatani reportedly said the ratio wouldincrease 0.2pp y/y to 1.8% in FY25, nearing the 2% government target for FY27 (Nikkeinewspaper, 15 April).3 FIGURE 7. Interest rate risk in bank accountsFIGURE 8. Outlook for government debt/GDP ratio1001201401601802002200204 06 08 10 12 14 16 18 20 22 24 26 28 30 32 34Growth (high-2% nominal growth in LT)Baseline (high-0% nominal growth in LT)GDP%Source: CabinetOffice,Barclays ResearchSecond, the ruling parties are reportedly mulling a supplementary budget to combat risingprices and support the economy ahead of the fall extraordinary Diet session to follow thissummer’s upper house election.Meanwhile, the Komeito and opposition parties are pushing fora reduction to the consumption tax ahead of the upper house election itself, strengtheningconcern about public finances. That said, the specific cont