Japanese government bonds (JGBs) are set for the worst quarterly selloff in more than two decades as the central bank loosens its grip on the market.
That’s a reminder for investors that the nation’s debt market relies in part on support from public-sector institutions like the Bank of Japan to outperform global peers.
The securities have lost 3% in the third quarter, the biggest drop since 1998, according to Bloomberg-compiled data as of Thursday. Government bonds globally outside Japan have slumped 4.6% during the same period, the most in a year, as lingering inflationary pressure fuels expectations that interest rates will stay high for longer.