Global fund managers turn bullish on Japanese government bonds

The shift is notable less for the yields themselves than for the fact that several large foreign managers cut JGB exposure earlier this year and are now reversing course — a sign that the domestic demand and policy backdrop has changed enough to overcome their earlier caution. This matters most for duration-sensitive global portfolios, where JGBs had been treated as a funding or avoidance trade rather than a destination. The open question is whether this is a tactical re-entry or the start of a durable foreign bid, and whether the policy environment that drew them in holds as longer-dated supply is absorbed.