Expectations of accelerated rate hikes by the Bank of Japan have resurfaced in the bond market. Overseas investors, anticipating future inflation control, have continued buying ultra-long-term bonds with maturities of more than 10 years.
Expectations of accelerated rate hikes by the Bank of Japan are strengthening again in the bond market. Overseas investors, looking ahead to long-term fiscal and interest-rate trends, continue to hold long positions in ultra-long-term Japanese government bonds. This has kept upward pressure on ultra-long-term yields.
It has been reported that 2 policy board members voted against a rate hike at the Bank of Japan's monetary policy meeting on the 17th and 18th. The market reacted immediately after the announcement, with the yen weakening, among other developments, prompting speculation that views on the future pace of rate hikes had become unsettled.
While buying of ultra-long-term bonds continues under these conditions, ultra-long-term yields have been trending higher. Attention is focused on overseas investors' caution toward investing in Japanese government bonds and the unwinding of the perception that they are undervalued.