Japan Bond Market Liquidity Hits Record Low Amid Intensifying Sell-Off
Economy
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CNBC TV18•21-01-2026, 06:52
Japan Bond Market Liquidity Hits Record Low Amid Intensifying Sell-Off
- •Japan's government bond market liquidity has fallen to record lows due to an intense sell-off and perceived buyers' strike.
- •The JGB Liquidity Index reached an all-time high on Tuesday, indicating significant deviation from anticipated yield levels.
- •Long-term yields, particularly 30- and 40-year bonds, surged over 25 basis points after PM Sanae Takaichi's tax cut pledge.
- •Japanese insurers sold a record amount of super-long bonds last month, raising concerns about a lack of natural buyers.
- •Foreign investors now account for over 65% of monthly cash JGB transactions, a significant increase from 12% in 2009.
Why It Matters: Japan's bond market faces unprecedented liquidity challenges as a major sell-off drives yields higher.
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