Macro Strategy Insight

Research evidence excerpt

Macro Strategy Insight

Global Markets Research

Macro Strategy Insight 22 June 2026

Macro Strategy - Japan

Research Analysts

May JSDA bond transactions and investor trends Strategy

Naka Matsuzawa - NSC

Pensions ramp up dip-buying of super-longs; foreign investors return to naka.matsuzawa@nomura.com

standard buying +81 3 6703 3864

-InMay,theyieldcurvebearsteepenedinthesuper-longend,withricheningagainst

swaps.

-Pensionfundsweretheprimarybuyersofsuper-longs,andwhilebuyingbyforeign

investorswasalsohigh,theyhavereachedtheirstandardpace.

-Life/non-lifeinsurersandregionalbanks/agriculturalfinancialinstitutionssoldsuper-

longsagainandcontinuetoliquidatepositions.

-Citybankshavestartedtobuyintermediates,notjustlong-termbonds.

In this report, we analyze recent investor trends based on the May JSDA bond transaction

data (Figures 1 and 2). This author was particularly struck by: (1) life/non-life insurers'

selling of super-longs; (2) regional banks' and agricultural financial institutions' selling of

super-longs; (3) trust banks' (pension funds') buying of super-longs; (4) foreign investors'

buying of super-longs and long-term bonds; and (5) city banks' buying of super-longs and

long-term bonds. In this same month, the JGB and JPY swap yield curves steepened in a

twist and asset swaps improved in the super-long space. Flows (1) and (2) are consistent

with steepening along the yield curve, while flows (3)-(5) are consistent with richening

against swaps. The absorption of super-long bonds is dependent on pension funds

and foreign investors, but in May buying was particularly skewed toward pension

funds. Foreign buying was at its standard pace.

In May, Japanese yields rose sharply through the middle of the month, and then fell

somewhat through the end of the month.