Three reasons tech could lead the market — again

Franklin Equity Group’s Matt Cioppa suggests we’re in the midst of a multi-year AI super-cycle, and this will keep us optimistic on the technology sector in 2026.

The Week in Markets

Japan bond rout deepens as markets brace for BOJ hike

Japanese government bond yields surged to new multi-year highs this week, with the 10-year touching 1.92%, a level last seen in 2007, as investors balked at Prime Minister Takaichi’s large stimulus plans and positioned for a possible BOJ rate rise on 18–19 December.

Invesco US said the recent jump reflects “growing expectations that the economic stimulus package… may turn out to be much bigger than previously expected” and warned that Japan’s growing reliance on foreign buyers makes markets more sensitive to fiscal slippage.

A new Robeco fixed income outlook added that “the risk of a higher terminal rate keeps us underweight JGBs,” underscoring a cautious stance on long-dated Japanese debt. State Street Investment Management, however, argued in their latest outlook that “Japanese government bonds may present an interesting opportunity in 2026… particularly for the belly of the curve” once the BOJ’s hiking cycle peaks.

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