Long-term interest rates are expected to face stronger upward pressure in the fourth week of October. Higher oil prices resulting from escalating tensions in the Middle East, along with signals of additional rate hikes before year-end at monetary policy meetings in Japan and the US, could be viewed as factors prompting bond selling.
According to Bloomberg's weekly outlook, long-term interest rates are expected to face upward pressure from the 26th through the 30th. Tensions in the Middle East and higher oil prices are raising inflation concerns, and signals of additional rate hikes before year-end at monetary policy meetings in Japan and the US could become a catalyst for selling in the bond market.
The analysis cites comments from Sumitomo Mitsui Trust Asset Management senior strategist Inadome Katsutoshi (稲留 克俊) and Okasan Securities chief bond strategist Hasegawa Naoya (長谷川 直也), noting that movements in interest rates and changes in risk tolerance in the equity market could affect markets.
The schedule for government bond auctions and the Bank of Japan's purchase operations are cited as market factors. At present, the November schedule is expected to be announced at 5 p.m. on the 30th.
Key factors include continued higher oil prices and monetary policy developments. Investors are expected to focus on the trend in long-term interest rates and the timing of announcements from policy meetings.