Inflation concerns loom over the Tokyo foreign exchange market as Japanese long-term bond yields surge to a 27-year high

Golden Ten Data reported on March 30 that in early Tokyo market trading, concerns over rising inflation led to a steepening of the Japanese government bond yield curve, with investors selling long-term bonds more aggressively than short-term bonds. According to a recent report by the JPMorgan Japan Market Research team, Japanese government bond yields increased and the yield curve ultimately steepened after oil prices rose due to escalating conflicts in the Middle East. The team stated: “We maintain a bullish stance on the steepening of spot Japanese government bonds.” Team members added that last Friday’s market volatility highlighted “the vulnerability and heightened volatility of the ultra-long-term government bond sector, suggesting that the market should remain cautious about duration risk.” The 2-year Japanese government bond yield remained unchanged at 1.375%, while the 10-year yield rose by 1.5 basis points to 2.385%, hitting an intraday high set last Friday—its highest level since February 1999.