Sumitomo Mitsui Financial (US:SMFG) Xin Lang Cai Jing·2026-01-21 04:39Core Viewpoint - Sumitomo Mitsui Financial Group plans to significantly increase its investment in Japanese government bonds following a recent surge in bond yields, aiming to double its current portfolio size of 10.6 trillion yen (approximately 67 billion USD) [1][3]. Group 1: Investment Strategy - The company intends to build a substantial position in Japanese government bonds after the recent spike in yields [1][3]. - The global market head of Sumitomo Mitsui, Nagata Yuki, indicated that the investment portfolio could reach twice its current size once fully established [1][3]. Group 2: Market Conditions - Japanese government bond prices fell sharply, with long-term yields reaching historical highs, raising concerns among investors about Prime Minister Kishi's fiscal policies ahead of upcoming elections [1][3]. - The Bank of Japan's gradual exit from large-scale bond purchasing has led to rising yields, prompting speculation about when major institutions would re-enter the Japanese bond market [1][3]. Group 3: Future Predictions - Nagata Yuki expressed a shift in focus from overseas bonds to Japanese government bonds, predicting that the USD/JPY exchange rate could reach 180 in the coming years [2][4]. - The forecast for the Nikkei 225 index suggests it may rise above 60,000 points by the end of the year, up from just under 53,000 points currently [2][4]. - The expected yield for 10-year Japanese government bonds is projected to exceed 2.5% by year-end, with a reasonable range estimated between 2.5% and 3% [2][4].