Pimco CEO Manny Roman on Japanese Bonds and the Sell America Trade

Summary of Pimco CEO Manny Roman on Japanese Bonds and the Sell America Trade

by Bloomberg

46m•January 22, 2026
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Overview of Pimco CEO Manny Roman on Japanese Bonds and the Sell America Trade

This Bloomberg Odd Lots episode—hosts Tracy Alloway and Joe Weisenthal interview Manny Roman, CEO of PIMCO—focuses on recent market moves (the so‑called “Sell America” trade), rising long‑term yields in the U.S. and Japan, and how large asset managers are positioning around geopolitics, AI/data‑center finance, mortgages and housing policy. Roman offers both CIO-level investment views and CEO-level strategic observations about flows, credit opportunities and operational use of AI.

Key topics covered

  • The January 20–21 market move: S&P down, bond yields up, dollar down (a “trifecta” sell‑off) and whether this signals a renewed Sell America trade.
  • Drivers of higher long‑end yields globally—especially the role of Japan (JGBs) versus a geopolitical risk premium.
  • The state of Japan’s reflation: inflation emergence, tighter labor market, corporate activism and implications for JGBs and equities.
  • Fixed income as an attractive return source vs. expensive equities.
  • Debt sustainability and the role of household savings and potential future taxation.
  • Wealth taxes and migration of high‑net‑worth individuals (state and country domiciles).
  • Mortgages, political interventions (Fannie/Freddie purchases), and the valuation opportunity in mortgage assets.
  • AI and data‑center financing: large IG issuance, opportunities for large managers, competition and deal economics.
  • Use of AI internally (productivity/compliance) and offensively (data-driven alpha).
  • Central bank credibility and how markets react to fiscal/monetary missteps (UK/Liz Truss example).
  • Geographic growth strategy: importance of Asia and interest in the Gulf; cautious view on China without clearer market access.

Main takeaways

  • Yield moves were a mix of Japan’s bond market repricing and geopolitical noise—Roman sees the overall reaction as modest and rational, not panic.
  • Fixed income looks compelling: investors can obtain “equity‑like” returns (mid-single to high single digits) from diversified fixed income portfolios, attracting flows away from equities.
  • Japan’s environment is structurally different now: real inflation pressure, corporate activism and tech/manufacturing strengths are creating a bullish equity case; the long end of its curve may continue to rise—but liquidity matters (40‑yr JGBs less informative than 10‑yr).
  • Debt sustainability concerns are mitigated somewhat by very large private savings pools—governments have revenue options (e.g., taxation) even if politically difficult.
  • Institutional advantages of large managers matter: PIMCO’s scale let it participate in very large data‑center financings that many cannot.
  • AI is both a defensive productivity lever (documentation, compliance, trade ops) and an offensive research tool when there’s lots of messy data (e.g., mortgages).
  • Geopolitics matter, but PIMCO focuses on where it has an informational or structural edge; they avoid building positions on widely known political narratives.
  • Central bank independence and credibility remain crucial; the market punishes fiscal/monetary crediblity failures quickly.

Notable quotes / insights

  • “The market is very rational and essentially discounts a lot of the noise… the currency barely moved.”
  • On fixed income: “I can make six or 7% holding a basket of fixed income. That looks really attractive.”
  • On Japan: “For 20 years, Japan has tried to restart inflation… and for 19 years it really hasn't worked. And then all of a sudden they managed to get somewhere.”
  • On wealth taxes: French experience shows wealthy individuals can vote with their feet—“the evidence in terms of how well wealth tax work is quite mixed.”
  • On AI adoption: “Anything which makes the factory simpler, more efficient, and safer is a really, really good thing.”

Actionable investor implications

  • Consider increasing exposure to long/medium‑term fixed income or diversified credit strategies while yields offer attractive nominal returns—but manage duration and liquidity risk.
  • Watch Japan closely: equity opportunities may be emerging alongside rising long‑end yields; prioritize liquid JGBs (e.g., the 10‑yr) for market signals.
  • For credit investors, evaluate AI/data‑center financings carefully—large issuers (tech giants) can provide high‑quality, large‑ticket credits, but analyze deal structure and sponsor strategy.
  • Mortgage and structured product specialists should continue screening for value—PIMCO views mortgage assets as cheap relative to other sectors, though political actions could affect dynamics.
  • Maintain currency diversification but avoid overreacting to single headline actions; dollar remains the dominant reserve currency.
  • Be cautious with momentum asset classes you don’t understand (Roman stays on the sidelines for gold and crypto despite strong momentum).

What to watch next

  • Further moves in U.S. and Japanese long yields (10‑yr/30‑yr/40‑yr JGBs) and JGB liquidity metrics.
  • Policy decisions affecting mortgages (Fannie/Freddie actions) and any institutional constraints on single‑family purchases.
  • Large AI/data‑center capital raises and who underwrites/finances them.
  • Fed communications and signals affecting credibility; fiscal policy moves that could provoke market stress (UK‑style scenarios).
  • Global fund manager sentiment (surveys) and flows into fixed income vs. equities.

Short summary of PIMCO’s positioning and philosophy (from Roman)

  • PIMCO favors structural positions and repeatable, process‑driven alpha rather than attempting to predict day‑to‑day political shocks.
  • Size is a competitive advantage for underwriting and taking meaningful portions of very large new issues.
  • Use AI to reduce repetitive work, improve compliance and potentially extract new predictive signals from large, heterogeneous datasets.
  • Geographic emphasis: expand in Asia and selectively in growth markets (Gulf, Australia); China remains conditional on clearer rules and access.

For someone who wants the essence: Roman sees recent moves as mixed (Japan repricing + headlines), finds fixed income attractive relative to stretched equities, views Japan’s reflation as real and investment‑positive, and emphasizes disciplined, scale‑enabled credit and mortgage strategies—while adopting AI for efficiency and data advantage.