The reason is because this isn’t a normal “we like the value, let’s quietly buy” moment. It’s a stabilization moment.

When Japan’s long dated yields jump this fast, it stops being about portfolio optimization and starts being about preventing a policy accident. A move like this threatens confidence, not just prices.

Japan’s Long Flight With Deflation (the backdrop)

For decades, Japan hasn’t just been battling slow growth it’s been battling expectations…

• People learned to wait because prices didn’t rise
• Companies learned to hoard cash instead of investing
• Wages stayed flat because no one believed demand would hold

That’s why Japan went so far with QE, negative rates, and yield curve control. Not because they wanted distortion, but because they were trying to break the psychology. Even now, the BOJ is walking a narrow path..normalize carefully without snapping demand or confidence.

Why This Bond Move Is Dangerous

A slow, orderly rise in yields is manageable.
A sharp, disorderly spike is not.

When long rates jump quickly, you get…

• higher borrowing costs spilling into the real economy
• pressure on equities and property
• households and businesses going defensive again

In Japan, that behavioral shift is the real risk. Once people start acting like old Japan again..saving more, spending less..inflation fades fast.

So Why Would A Bank Announce It’s Buying Plans?

Because this isn’t really about trading. It’s about signaling a floor.

By saying “we’re ready to buy when things stabilize,” Sumitomo Mitsui is doing a few things at once…

• telling the market there’s a large domestic buyer waiting
• calming volatility without forcing the BOJ to intervene immediately
• anchoring expectations around what yield levels are considered “reasonable”

It’s a verbal backstop. Japan has always used communication as part of policy transmission, not as an afterthought.

What’s Different From The Abenomics Era

Back then, the BOJ dominated everything. It could overwhelm the market.

Now…

• foreign investors matter more
• positioning moves faster
• JGBs behave more like global risk assets during stress

That’s why domestic institutions stepping in..and saying so publicly matters more than it used to.

What To Watch Next

This year is a balancing act…

• If yields settle and wage growth holds, Japan can lock in inflation the healthy way
• If yields keep rising fast, Japan risks tightening conditions too much and slipping back into deflation behavior

That’s the real reason this was said out loud. In Japan, communication isn’t commentary..it’s policy.