Group 1: Report Industry Investment Rating - Not provided in the given content Group 2: Core View of the Report - The rise in Japan's ultra-long-term government bond yields is the result of multiple factors including market re - evaluation of Japan's fiscal prospects, adjustment of the Bank of Japan's monetary policy expectations, and structural imbalances in population and finance. Japan's long - term bond yields face upward risks of fluctuation in the future [1][7][12] Group 3: Summary by Relevant Catalogs 1. Japan's Ultra - Long - Term Government Bond Yields Reach High Levels - In early July, Japan's ultra - long - term government bond yields rebounded. On July 8, the 30 - year government bond yield rose 12.5 basis points to a phased high of 3.09%, and the 40 - year yield climbed to 3.36%. Global bond markets also showed a linkage, with the 10 - year US Treasury yield rising from 4.35% to 4.41% and the 10 - year Chinese government bond yield rising from 2.63% to 2.70% between July 3 and 9. Market nervousness re - emerged in early July, reflecting concerns about future fiscal policies and political developments [4] 2. Reasons for the Significant Rise in Japanese Bond Yields - **Market Re - evaluation of Fiscal Prospects**: The upcoming July 20 Japanese Senate election is a focus. The ruling coalition risks losing the majority of seats. The opposition's call for tax cuts and increased welfare spending exacerbates concerns about fiscal sustainability and raises expectations of future bond supply expansion. The unresolved US - Japan tariff negotiation also adds uncertainty to Japan's export and inflation prospects [7] - **Adjustment of BOJ's Monetary Policy Expectations and Weakening of Domestic Bond Demand**: Since 2024, the Bank of Japan has gradually exited ultra - loose monetary policy. The market expects it to be in a quantitative tightening cycle, and the possible adjustment of the bond purchase plan leads to a lack of marginal buyers for ultra - long - term bonds. High inflation and rising interest rates have also suppressed domestic financial institutions' demand for long - term bonds [7][9] - **Structural Imbalances in Population and Finance**: Japan's deepening population aging restricts fiscal space and long - term investment demand. The proportion of the population aged 65 and above has increased from 18.4% in 2001 to 30.2% in 2024 and is expected to reach 36.7% in 2045. The government's large social security expenditure due to aging leads to a high fiscal deficit and government debt, and the change in investment preferences of the elderly also affects the demand for long - term bonds [10] 3. Future Outlook - Japan's long - term bond yields are affected by multiple factors and face upward risks of fluctuation. Attention should be paid to the US - Japan tariff negotiation, the results of the Senate election, and the 20 - year government bond auction on July 10. If the ruling coalition loses its majority in the Senate election, it may lead to a re - pricing of fiscal expansion expectations and push up long - term bond yields. The recent demand for ultra - long - term Japanese government bonds has been acceptable [12][15]