Takaichi trade gets a rethink one year on as bond appeal grows

Fund managers are beginning to rethink the so-called Takaichi trade to buy stocks and sell bonds, and they are now turning more bullish on bonds. | Bloomberg

Oct 15, 2026

For much of Sanae Takaichi’s first year as prime minister, the prevailing trade in Japan was straightforward: buy stocks, sell bonds. Not anymore.

Fund managers at major asset management firms including JPMorgan Asset Management and Mitsubishi UFJ Asset Management are beginning to rethink the so-called Takaichi trade and turn less bearish on bonds. Yields have reached attractive entry points at Japan’s latest bond auctions, while growing pressure from Washington for fiscal restraint constrains her expansionary agenda.

Takaichi’s expansionary stance and planned state support for strategic industries helped push stocks to record highs, after renewed debt fears sent shockwaves through global bond markets in January. A portfolio long the Topix and short Japanese government bonds has returned more than 30% over the past year, beating the Topix, Bloomberg Intelligence data show.

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