What moved markets in October
A global credit chill showed up in Japan, where the cost to insure corporate debt rose across the board and did so by the most since September 2022. From Oct. 1 through Oct. 28, five year credit default swap prices increased for every one of the 40 major Japanese names Bloomberg tracks, with a median widening of 12 basis points.
SoftBank Group Corp. and Nissan Motor Co. were among the largest movers. The last time Japan saw a comparable jump was during late 2022, when rapid rate hikes worldwide and turmoil in UK markets under Liz Truss rattled credit.
Why traders are watching now
The backdrop is global. AI related credit worries have spread, US investment grade bond spreads have pushed wider, and CDS climbed for large tech names including Meta Platforms Inc. Mizuho Securities Co.'s senior credit analyst Toshiyuki Suzuki remarked that, "AI momentum has weakened, and concern is spreading across the market," pointing to credit worries tied to CoreWeave Inc. He also noted that CDS have been quick to respond to bad news in the European auto industry, including job cuts.
Kazuma Ogino of Nomura Securities Co., a senior credit analyst, said that the combination of heavy new supply and the latest drop in government bond yields has prompted investors to demand wider spreads. He added that worries about AI investment alongside France's public finances are "resonating," widening CDS, and he characterized Japan's bond backdrop as "more of a headwind."
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Market depth and recent supply
Issuance stayed busy despite the shakier tone. Japanese corporate bond sales in October totaled about ¥2.5 trillion, a record for that month and up around 50% from a year earlier, while issuance during the first half of fiscal 2026 reached a record ¥10.6 trillion. Spreads on domestic corporate bonds stand close to their highest level in roughly two and a half years.
There are already cracks. After assessing market conditions, Mitsui Fudosan Co. pulled a planned bond; NTT Finance Corp. ended up raising less than it first targeted; and Export Import Bank of Korea delayed a global yen offering amid volatility.
What this means for your portfolio
In plain English: credit is getting pricier in Japan, in step with global stress, and the pressure is comparable to the flare up seen in September 2022. That mix has lifted spreads and complicated funding for some borrowers, which can move bond prices and the yields you see in fixed income.
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