Report published September 28, 2026

Mizuho Securities: 40Y JGB Auction Preview – Relative Value Appeal & Asset Swap Strategy

Mizuho Securities · September 28, 2026

Mizuho Securities previews the roughly JPY300 billion reopening of the 40-year JGB (JU19), noting that yields above 4% and improved relative value should support bidding. Given persistent concerns over rising US yields, the analyst highlights 40y asset swaps as the preferred vehicle for carry.

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Finvaulta summarizes Mizuho Securities's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Tomorrow's 40y JGB auction is an approximately JPY300 billion reopening of JU19 with 40y absolute yields above the psychologically significant 4% level, potentially drawing dip-buyers.
2.Asset swaps offer the most attractive risk/reward profile for carry generation while limiting downside risk compared to outright longs or curve flatteners.
3.Potential auction headwinds stem from rising US yields and market speculation about a more hawkish Federal Reserve following the September FOMC rate hike.

(1) Positives and negatives ahead of the 40y auction
POTENTIAL POSITIVES
POTENTIAL NEGATIVES
Pre-auction comment
ASSET SWAPS WARRANT CONSIDERATION

Report data

Chart 1. 40y JGB yield and 40y auctions

Metric	Estimate	Context
40y JGB Auction Planned Reopening Size	300 JPY billion	Tomorrow's 40y JGB auction planned issuance size for issue JU19.
40y JGB Yield Level	4.0%	Yield has risen some distance above the psychologically significant 4% level.
WTI Crude Oil Futures Price	100 USD/bbl	Prices remain below USD100/bbl after climbing past that level earlier in the month.