{
  "title": "Assessing the Risks to the Japanese Government Bond (JGB) Market",
  "publication": "IMF Working Papers, December 1, 2011",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/assessing-the-risks-to-the-japanese-government-bond-jgb-market-25435",
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  "summary": "Despite the rise in public debt, Japanese Government Bond (JGB) yields have remained low and stable, supported by steady inflows from the household and corporate sectors, high domestic ownership of JGBs, and safe-haven flows from heightened sovereign risks in Europe.",
  "sections": [
    {
      "heading": "Overview / Main findings",
      "content": "- Despite the rise in public debt, Japanese Government Bond (JGB) yields have remained low and stable.\n- Factors supporting low and stable JGB yields:\n  - steady inflows from the household and corporate sectors\n  - high domestic ownership of JGBs\n  - safe-haven flows from heightened sovereign risks in Europe\n- Over time, the market's capacity to absorb new debt will likely shrink as population ages and risk appetite recovers."
    },
    {
      "heading": "Short-term risks",
      "content": "- A decline in fund supply from the corporate sector, where financial surpluses are abnormally high, could push up JGB yields.\n- Spillovers from global financial distress could push up JGB yields."
    },
    {
      "heading": "Long-term risks and structural pressures",
      "content": "- Population aging is expected to reduce the market's capacity to absorb new debt.\n- Recovery in risk appetite (relative to current safe-haven conditions) would reduce demand pressures that have supported low JGB yields."
    },
    {
      "heading": "Policy recommendations and mitigation measures",
      "content": "- Fiscal reforms to reduce public debt more quickly.\n- Lengthening the maturity of government bonds to help limit JGB market risks."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Banking, Corporate sector, Credit default swap, Economic sectors, Financial institutions, Government securities, Loans, Money, Public debt\n- Keywords: Corporate sector, Credit default swap, Financial Distress, Fiscal Sustainability, Global, Government securities, Government yields, JGB cash market, JGB CDS contract, JGB holding, JGB market, JGB sell-off, JGB yield, Loans, maturity JGBS, Sovereign Risk, WP, yield\n\n---\n\n Content in this bundle\n\n- Microsoft Word - DMSDR1S-4610348-v9-Japan-2011Nov-WorkingPaper-JGBRisksKT-RL.doc\n  - Microsoft Word - DMSDR1S-4610348-v9-Japan-2011Nov-WorkingPaper-JGBRisksKT-RL.doc (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Microsoft Word - DMSDR1S-4610348-v9-Japan-2011Nov-WorkingPaper-JGBRisksKT-RL.doc (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/assessing-the-risks-to-the-japanese-government-bond-jgb-market-25435"
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    "Authors: Waikei R Lam, Kiichi Tokuoka",
    "Published: December 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781463927264.001",
    "Despite the rise in public debt, Japanese Government Bond (JGB) yields have remained low and stable.",
    "Factors supporting low and stable JGB yields:",
    "Over time, the market's capacity to absorb new debt will likely shrink as population ages and risk appetite recovers.",
    "A decline in fund supply from the corporate sector, where financial surpluses are abnormally high, could push up JGB yields.",
    "Spillovers from global financial distress could push up JGB yields.",
    "Population aging is expected to reduce the market's capacity to absorb new debt.",
    "Recovery in risk appetite (relative to current safe-haven conditions) would reduce demand pressures that have supported low JGB yields.",
    "Fiscal reforms to reduce public debt more quickly.",
    "Lengthening the maturity of government bonds to help limit JGB market risks.",
    "Subject: Banking, Corporate sector, Credit default swap, Economic sectors, Financial institutions, Government securities, Loans, Money, Public debt",
    "Keywords: Corporate sector, Credit default swap, Financial Distress, Fiscal Sustainability, Global, Government securities, Government yields, JGB cash market, JGB CDS contract, JGB holding, JGB market, JGB sell-off, JGB yield, Loans, maturity JGBS, Sovereign Risk, WP, yield",
    "**Microsoft Word - DMSDR1S-#4610348-v9-Japan_-_2011__Nov__-_Working_Paper_-_JGB_Risks__KT-RL_.doc**"
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