The BEI is used as a measure of the inflation rate the market expects. Besides the inflation outlook, it also contains the value of the floor on the principal at maturity of Japan's inflation-linked bonds (which the Ministry of Finance calls the deflation floor on inflation-indexed JGBs), the low liquidity of inflation-indexed JGBs, and the difference in risk premia between the two bonds. When inflation-indexed JGBs are hard to trade and their prices fall, the real rate rises and the BEI comes out lower.
Breakeven inflation rate
- Japanese
- ブレーク・イーブン・インフレ率
- Also known as
- BEI
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
The breakeven inflation rate (BEI) is the yield on a fixed-rate government bond (the nominal rate) minus the yield on an inflation-linked bond of the same maturity (the real rate). If inflation equals the BEI, investing in either bond gives the same return.