Japanese government bonds are staging a comeback, notching their second consecutive day of gains as market confidence rebuilds following this week's sharp downturn. The rally is being driven primarily by super-long maturity instruments, signaling a shift in investor sentiment.

The earlier selloff was sparked by PM Takaichi's election commitment to implement tax cuts, which stirred uncertainty about fiscal dynamics. However, as traders digest the implications, the panic appears to be easing. The rebound in longer-dated JGBs suggests that despite near-term policy noise, the underlying bid for duration remains intact—a telling sign about where smart money sees value right now.