The yield on Japan's 30-year government bonds rose to 4.235% on Monday, reaching the highest level since the issuance of such bonds for that maturity in 1999. It was not until May of this year that the yield surpassed 4% for the first time.
The Bank of Japan stated that the massive issuance of bonds by AI companies is driving up long-term interest rates. Bank of Japan Vice Governor Masahiko Ueda described this phenomenon as a "huge positive demand shock," which is contributing to increased economic activity and rising prices.
Last week, Japan's inflation data, which was stronger than expected, further exacerbated this round of bond selling. Traders are currently weighing whether the Bank of Japan will raise interest rates again.
The Bank of Japan stated that it will closely monitor market conditions. Investors are also awaiting the policy speech by Japanese Prime Minister Yoshihide Suga.
