Japanese Bond Yields Drop Amid Potential Government Intervention

Japan’s Ministry of Finance is considering cuts to long-dated bond issuance after a sharp decline in demand sent yields soaring. The move, expected to be finalized in June following market consultations, targets 20-, 30-, and 40-year Japanese Government Bonds (JGBs).

Traditional buyers like life insurers have retreated from the market, while global investors grow wary of Japan’s unsustainable debt trajectory. The 30-year JGB yield plunged 12.5 basis points to 2.91%—its lowest since mid-May—while the 10-year benchmark fell 5 basis points to 1.455%.

The yen weakened following the news as markets priced in prolonged accommodative policies. "When elephants like the MOF move, even crypto markets take notice," remarked a fixed-income trader at a major exchange, highlighting the interconnectedness of traditional and digital asset markets.