10年期日本国债能上涨多少？

Japan Rates Strategy| Japan Koichi SugisakiStrategistKoichi.Sugisaki@morganstanleymufg.com+81 3 6836-8428 How much can 10y JGB rally? Hiromu UezatoStrategistHiromu.Uezato@morganstanleymufg.com+81 3 6836-8431 The risk that the BoJ is falling behind the curve has eased, eventhough Middle East uncertainty remains high. With the 10-yearJGB sector still carrying an estimated 30-40bp inflation riskpremium, we continue to see attractive risk-reward in being longthe belly as the market shifts from inflation overshoot concernstoward growth downside risks. We also discuss lifers' disclosureat end-Y2025. Key Takeaways The 10-year JGB sector has started to stabilize as breakevens have stoppedmaking new highs and inflation overshoot concerns have eased. BoJ communication remains hawkish, but the market already prices nearly threehikes over the next 12 months, leaving limited room for further front-endrepricing. If prolonged Middle East tensions weaken growth through supply-chaindisruption and tighter financial conditions, the belly’s inflation risk premiumshould compress. Large lifers decreased their 10y+ JGB holdings in FY3/26 amid switchingoperations from low coupon to high coupon bonds. We see limited net durationdemand and no clear repatriation sign. Swap and swaption notionals declined as ESR-driven ALM adjustments matured;payer hedges may be rebuilt selectively to manage lapse risk, not to add broadduration. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investmentdecision. For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearancesand trading securities held by a research analyst account. Interest Rate Strategy Japan | How much can 10y JGB rally? Koichi Sugisakikoichi.sugisaki@morganstanleymufg.comHiromu Uezatohiromu.uezato@morganstanleymufg.com MORGAN STANLEY MUFG SECURITIES CO., LTD. +81 3 6836-8428 +81 3 6836-8431 The risk of BoJ falling behind the curve somewhat eased. The Middle East situation remains highly uncertain, and there is still limited visibility onany agreement toward a ceasefire. That said, concerns about an inflation overshoot havestarted to ease somewhat. On Polymarket, the view that the Strait of Hormuz will return to normal soon has againreceded recently. Even so, breakevens have not reached new highs (see Exhibit 1 ). In the JPY rates market, the 10-year sector finally appears to be finding firmer footing. Thislikely reflects a declining inflation risk premium, as concerns about an inflation overshoothave eased somewhat. The 10-year JGB auction on June 2nd had a large amount of unidentified demand (Nikkeinews paper, 4th-June, only Japanese article is available). This effectively confirmed strong demand from investors that appear to have receiveddirect allotments. On the other hand, short-term rates expectations started to reprice higher (see Exhibit 2 ).At his speech to the Kisaragi-kai on June 3rd, BoJ Governor Kazuo Ueda emphasized themessage that higher crude oil prices would weigh on growth, but that, under currentconditions,he was more alert to upside risks to prices. In particular, the Governor suggested that downside risks to the economy were limited,given the resilient corporate earnings and resilient private consumption supported bywage increases following the spring wage negotiations, and government measures to easethe burden of energy costs. By contrast, the BoJ appears to see greater upside risks to prices. It points to the risingtrend in inflation expectations and the recent increase in the Corporate Goods Price Index(CGPI). Governor Ueda also emphasized that real rates remain negative and that financialconditions are still accommodative. He also noted that the recent rise in long-term yieldshas come from concerns on the risk of BoJ falling behind the curve. In that context, he argued that it is important to secure market confidence that inflationwill be appropriately controlled through appropriate conduct of monetary policy. Giventhe clear emphasis on upside price risks, our economists maintain their call for a June ratehike. Overall, the JGB curve twist-flattened this week (see Exhibit 3 ). This reflected higherpolicy-rate expectations centered on the front end, driven by the BoJ’s hawkish shift, and adecline in the inflation risk premium in the medium- to long-term sector. Our View Differs Our economists, however, believe thatsecond-round inflation effects are unlikely tomaterialize(see