Different perspectives on Japanese bond strategies have emerged.

Analysts from Morgan Stanley MUFG are paying attention to emerging movements. They remain optimistic about medium term government bonds, but have not changed their cautious stance on long term bonds.

The reason is simple. Changes in the U.S. economy could strengthen the scenario for the Bank of Japan to lower its terminal rate. In this case, the medium term sector is likely to benefit.

However, there are also pitfalls. Although fiscal pressure has somewhat eased under the new administration, super long-term bonds face another issue. According to the investment plans of Japan's top 10 life insurance companies for the second half of 2025, demand for super long-term bonds is expected to be limited. In other words, a situation is approaching where a lack of buyers is a concern.

Buy in the medium term, hold off in the long term──this asymmetric positioning reflects the true intentions of market players.