An Azimut fund manager is strategically investing in Japanese bonds, anticipating a correction after recent significant yield surges. This move comes as Japanese government bonds have experienced uncharacteristic volatility, with yields reaching record highs fueled by rising oil prices and inflation fears, as well as concerns over government spending.
The Japanese bond market, valued at $7.6 trillion, has seen substantial fluctuations. For instance, in January 2026, a mere $280 million in trading led to a $41 billion wipeout across the Japanese bond curve. More recently, on July 23, 2025, an auction for 40-year Japanese government bonds recorded its weakest demand since 2011, underscoring ongoing investor anxieties.
While some strategists, like Kiyoshi Ishigane of Mitsubishi UFJ Asset Management, point to fiscal worries as a primary driver, others note a recent slip in shorter-dated bond yields due to falling oil prices easing inflation concerns. This mixed environment presents both risks and opportunities for investors like the Azimut fund manager who are looking to capitalize on potential rebounds in the market.
