Following Japan's snap election, investors may start buying longer-dated Japanese debt again. A Mizuho strategist suggests that when the 10-year yield hits 2.5%, big asset managers could re-enter the market. The move comes after a period of uncertainty, as investors were hesitant amidst the political climate and shifts in monetary policy.

This potential shift is vital for the Japanese government, which relies on the bond market to fund its operations. A sustained lack of demand could drive up borrowing costs. The Bank of Japan's yield curve control policy, which caps the 10-year yield, is also a key factor influencing investor behavior.

The election results are likely to calm investor nerves, potentially leading to increased buying. The yields on Japanese government bonds are closely watched globally, as they influence borrowing costs and investment strategies. Market participants will be keenly observing trading activity to gauge the strength of the return. Ultimately, the market awaits the next move.