Core Viewpoint - The agreement between the US and Japan is expected to increase fiscal risks for Japan, leading to pressure on the Japanese bond market [1] Group 1: Market Reactions - Japanese stock market has risen due to the US-Japan trade agreement, while the bond market perceives increased fiscal risks [1] - The Japanese government has committed to invest $550 billion in the US, which may negatively impact Japan's credit and drag down the yen and the economy [1] Group 2: Government and Fiscal Policy - The weakening of the ruling coalition may lead to compromises with opposition parties, potentially resulting in a reduction of the consumption tax and increased cash handouts [1] - Demand for 40-year Japanese government bonds at this week's auction reached the lowest level since 2011, indicating market avoidance due to fiscal risks [1] Group 3: Economic Implications - Prolonged high yields could increase the financing costs for the Japanese government amid ongoing economic uncertainty [1]

Core Viewpoint - The yield on 40-year Japanese government bonds has decreased by 5.5 basis points to 3.4% [1] Group 1 - The decline in the yield indicates a potential shift in investor sentiment towards long-term government bonds [1] - A decrease in bond yields often reflects increased demand for safer investments amid economic uncertainty [1] - The current yield level may influence future borrowing costs for the government and impact overall economic conditions [1]

Core Viewpoint - The yield on 40-year Japanese government bonds has increased by 3.5 basis points to 3.39% [1] Group 1 - The rise in yield indicates a shift in investor sentiment towards long-term government debt in Japan [1] - The increase of 3.5 basis points reflects broader trends in the bond market and potential inflationary pressures [1]

40年期日本国债收益率日内涨18个基点至3.505%。 ...

Group 1 - The auction of 10-year Japanese government bonds showed strong performance, with a bid-to-cover ratio of 3.51, higher than the 12-month average of 3.14, indicating reduced upward pressure on long-term bond yields due to weakened expectations of interest rate hikes by the Bank of Japan [1][4] - Following a poorly received 20-year bond auction in May that led to record high yields for ultra-long bonds, the Japanese government has adjusted its bond issuance plan to stabilize demand, maintaining the issuance volume of 10-year bonds while reducing that of 20, 30, and 40-year bonds [4] - The sentiment in the Japanese bond market appears positive as the Ministry of Finance's decision to reduce ultra-long bond issuance has been well-received, although caution remains regarding the upcoming 30-year bond auction [4][5] Group 2 - The 10-year Japanese government bond serves as a benchmark for long-term loan rates, significantly impacting mortgage rates and corporate borrowing costs [4] - Despite the strong performance of the 10-year bond auction, yields on 30 and 40-year bonds have not significantly declined, reflecting market caution ahead of the 30-year bond auction [5] - The recent short-term survey indicated a significant decline in confidence within the automotive sector, which may influence the Bank of Japan's decisions regarding interest rates [4]

Core Viewpoint - From July, the issuance scale of 40-year and 30-year Japanese government bonds will be reduced by 1 trillion yen for each auction [1] Group 1 - The reduction in bond issuance is a significant policy change that may impact the Japanese bond market [1] - This decision reflects the government's strategy to manage debt levels and interest rates [1]

Core Viewpoint - From July, the issuance scale of 40-year and 30-year Japanese government bonds will be reduced by 100 billion yen for each auction [1] Group 1 - The reduction in bond issuance is a significant policy change that may impact the Japanese bond market [1] - This decision reflects the government's strategy to manage debt levels and interest rates [1] - Investors may need to adjust their strategies in response to the decreased supply of long-term bonds [1]

Core Viewpoint - The Japanese Ministry of Finance plans to reduce the issuance scale of ultra-long-term bonds starting from July, while increasing the issuance of short-term bonds, including 2-year bonds [1] Group 1 - From July, the issuance scale of 40-year Japanese government bonds will be reduced by 100 billion yen in each auction [1]

Group 1 - The U.S. bond market is experiencing an unprecedented crisis of confidence, with the 30-year Treasury yield surpassing 5%, nearing the highest level since the 2007 financial crisis [1] - Concerns about the long-term fiscal situation of the U.S. are deepening, as the total federal debt has exceeded $36 trillion, with a debt-to-GDP ratio over 124%, significantly above international warning levels [1] - Interest payments on the debt are projected to exceed $1 trillion in the fiscal year 2024, becoming the third-largest government expenditure, surpassing defense spending [1] Group 2 - Major Wall Street investment firms are shifting to risk-averse strategies, systematically avoiding 30-year U.S. Treasury bonds and reallocating funds to mid-term bonds (5 to 10 years) [3] - These mid-term bonds offer relatively attractive returns while effectively reducing interest rate risk exposure, as firms like Pacific Investment Management Company adopt similar defensive strategies [3] - This collective adjustment in investment portfolios has yielded positive risk control outcomes this year, with investors seeking higher risk compensation for long-term lending to the U.S. government in the current fiscal environment [3] Group 3 - The U.S. Treasury yield curve is exhibiting a rare steepening trend, with the 30-year yield rising significantly while short-term yields (2-year, 5-year) are declining [4] - The difference between the 30-year and 5-year yields has surpassed 100 basis points for the first time since 2021, indicating substantial selling pressure on long-term bonds [4] - Recent bond auctions from major economies, including the U.S. and Japan, have faced weak demand, raising concerns about the future demand for long-term government bonds [4]

Group 1 - The Federal Reserve is facing a difficult balancing act regarding inflation and economic growth, with some officials advocating for interest rate cuts while others caution about the long-term impacts of tariffs on inflation [1][1][1] - The European Commission aims to reduce carbon emissions by 54% by 2030, slightly below its 55% target, and plans to propose a 90% reduction by 2040 despite opposition from member states [2][2] - Japan's first dedicated AI law aims to promote AI technology development while preventing misuse, establishing an "AI Strategy Headquarters" led by the Prime Minister [2][2] Group 2 - Japan's 40-year government bond auction saw a maximum bid yield of 3.1350%, the highest since its issuance in November 2007, with a bid-to-cover ratio of 2.21, the lowest since July 2024 [3][3] - The New Zealand Reserve Bank lowered its benchmark interest rate by 25 basis points to 3.25%, indicating room for further rate cuts [3][3] - OPEC+ agreed to maintain its current oil production quota plan, with a meeting scheduled for May 31 to discuss potential production increases of 411,000 barrels per day [4][4]