Sharp rise followed by sudden plunge after a week! A rollercoaster ride in the long-term Japanese government bond yields.

Noticed that, after a rapid increase for a week, the yields of Japanese 30-year and 40-year government bonds fell sharply by more than 10 basis points at the end of Friday. During the late trading session in the Tokyo market, the 30-year yield dropped to 3.055%, a decrease of 11.5 basis points in a single day, after reaching a historical high earlier in the week. The 40-year yield fell by 13.5 basis points to 3.540%. The trend in the late trading on Friday was partially driven by the decrease in US Treasury yields and the regular bond-buying operations by the Bank of Japan. Tadashi Matsukawa, the head of bond investment at PineBridge Investments Japan, pointed out that investors' positioning adjustments before the weekend exacerbated market volatility. Matsukawa added that it is currently difficult to judge whether the underlying trend driving higher yields has changed, and there are still concerns in the market about the upcoming 40-year government bond auction next week. Masaki Kiyomori, chief strategist at SMBC Nikko Securities, stated that buying interest in the 40-year government bonds led the market rebound. The rise in yields in Japan is part of a global trend, as long-term borrowing costs in major economies worldwide have soared amid investors' doubts about the government's ability to cover massive fiscal deficits. However, in the Japanese market, other factors are exacerbating this trend, especially with the Bank of Japan reducing bond purchases amid accelerating inflation, while traditional buyers such as life insurance companies have been unable to fill the demand gap. This situation is troubling the Japanese life insurance industry. Nippon Life Insurance disclosed on Friday that its unrealized losses on domestic bond holdings due to rising interest rates more than tripled in the previous fiscal year. Sony Life Insurance stated this week that if domestic interest rates continue to rise, they will take measures, including selling government bonds, to avoid asset write-downs.