Jingshun: It is necessary to take a more cautious investment stance towards Japanese government bonds

Shun's Tomo Kinoshita stated in an email that given the risk of continued increase in long-term yields, it is necessary to take a more cautious investment stance on Japanese government bonds. The global market strategist expressed concerns that if the temporary consumption tax reduction proposed by Japanese Prime Minister Naoto Kan becomes a permanent measure, it could put pressure on Japan's fiscal condition. Kinoshita said, "By the end of 2025, Japan's total government debt will reach 229.6% of GDP." Kinoshita added that concerns about Japan's future fiscal health have led to an upward trend in long-term Japanese government bond yields, which in turn has exacerbated fiscal pressure through higher debt-servicing costs.