Pension funds distort bond markets the world over, but in few places is the effect so large as in Japan, which has both a lot of public debt and a lot of pension funds to buy it. So forthcoming reforms to the pension system are of considerable interest to bond investors, according to analysis by Societe Generale.

Takuji Okubo, an analyst for the bank in Tokyo, wrote in a note out yesterday that the government is expected to announce reforms at the end of June, but that they won't go far enough in addressing the country's problem. Like many Western nations - but worse than many of them - Japan has an ageing population problem.