MUFG wades back into Japanese bonds with eye on policy risks

Atsushi Yamashita, head of global markets business at MUFG Bank, says he expects Japan’s 10-year government bond yields to peak at about 3.2%, during an interview in Tokyo on Tuesday. | Bloomberg

Oct 15, 2026

Japan’s biggest bank is tentatively getting back into the country’s benchmark government bonds, even as it remains concerned that yields could further spike due to fiscal and monetary policies in the nation.

“We plan to rebuild our position gradually going forward while carefully assessing interest-rate levels,” said Atsushi Yamashita, chief executive of MUFG Bank’s global markets business. Yamashita expects Japan’s 10-year government bond yields to peak at about 3.2%, just above the three-decade high of 3.115% reached earlier this month.

But Yamashita remains wary that yields could climb higher if the Bank of Japan struggles to contain inflation or Prime Minister Sanae Takaichi fails to convince investors that she can maintain a grip on government finances. “We don’t yet think risks of a further yield rise have been completely eliminated,” he said in his first interview since taking the role at the core unit of Mitsubishi UFJ Financial Group.

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