Core Viewpoint - The Bank of America analysts indicate that the Bank of Japan is unlikely to address the supply-demand imbalance causing the surge in ultra-long-term government bond yields [1] Group 1 - Analysts predict that the Bank of Japan will continue to reduce its bond purchases by 400 billion yen per quarter until March 2026 [1] - Starting from April 2026, the bond purchase reduction is expected to further decrease to 300 billion yen per quarter, with the plan extended for another year [1] - The analysts express that the Bank of Japan does not plan to respond to the oversupply issue of ultra-long-term bonds [1]

Core Viewpoint - The primary reason for the weakness in Japanese government bonds is the supply-demand imbalance, as stated by Société Générale [1] Group 1: Supply and Demand Dynamics - Stable auction supply and accelerated quantitative tightening have increased bond supply [1] - Domestic investor demand has weakened, while global term premiums have risen [1] Group 2: Market Performance - The auction amount for 20-year Japanese government bonds is at its lowest in nearly 40 years [1] - The yield on 30-year Japanese government bonds has reached unprecedented levels since the series began [1] Group 3: Future Outlook - The vulnerability of Japanese government bonds is expected to persist until changes occur in the Bank of Japan's bond purchasing plans, the Ministry of Finance's issuance structure, or an increase in demand [1] - However, these changes are unlikely to happen in the short term [1]