Global Markets Daily: Can Japanese Savings Boost JGBs?

Research evidence excerpt

Global Markets Daily: Can Japanese Savings Boost JGBs?

Economics Research

20 July 2026 | 9:21AM BST

n Recent comments by Japanese finance minister Katayama and Prime Minister George Cole

+44(20)7552-1214 |

Takaichi suggest policymakers are considering ways to increase domestic george.cole@gs.com

Goldman Sachs International

purchases of Japanese assets, with two potential measures that could support

Isabella Rosenberg

JGBs: adjusting GPIF’s asset allocation towards domestic assets, and allowing +1(212)357-7628 | isabella.rosenberg@gs.com

JGBs to be included in the tax-free NISA savings vehicle. Goldman Sachs & Co. LLC

n Under GPIF’s current strategy, there is roughly USD75bn of room to increase

allocation to JGBs. While not particularly large relative to ongoing rebalancing

flows, which are themselves generated by higher yields, a weaker currency, and

domestic equity outperformance, a pro-active reallocation would carry greater

signalling value than these mechanical flows.

n We estimate that shifting the domestic bond share from 27% to 31% would be

worth around 3-6bp in 30y swap spreads, comparable to the 8bp round trip seen

this week, though the pace of portfolio adjustment is likely to be slow given the

domestic bond share has only fluctuated by 1-2ppts per year.

n Allowing tax-advantaged ownership of JGBs through NISA could increase

demand, but low household allocations are more likely a function of historically

low yields than tax status; as in Italy, rising retail ownership is typically associated

with rising, not falling, yields.

n Both measures have the potential to increase demand for JGBs, but the majority

of the impact is likely to come through signalling and positive feedback loops

rather than outright purchases. We see more room for 20s and 30s to