CoinInsight360.com logo CoinInsight360.com logo
America's Social Casino

Cryptopolitan 2025-05-23 08:51:23

Japanese bonds recover slightly after record slump as unrealized losses surge

Japanese government bonds edged up slightly on Friday, clawing back ground after a brutal week that saw yields on long-term debt hit historic highs. The rebound followed five straight days of selloffs, driven by inflation concerns, weak investor appetite, and rising anxiety over Japan’s ballooning fiscal deficit. According to Reuters, the chaos in the bond market started after data showed core consumer inflation in April surged to 3.5%—the highest in over two years—piling pressure on the Bank of Japan to stay aggressive with rate hikes. The most dramatic damage hit the 20, 30, and 40 year segments. Traders dumped these ultra-long Japanese government bonds as lawmakers pushed for consumption tax cuts, a move many saw as reckless in the face of growing public debt. Bond prices tanked. Yields, which move in the opposite direction, spiked across the board. On Wednesday, the 30-year JGB yield hit a record 3.185% before slipping back to 3.115% by Friday. The 40-year yield, which touched 3.675% on Thursday, retreated to 3.6%. BOJ reacts as ultra-long yields spiral Governor Kazuo Ueda broke silence on Thursday, telling reporters the central bank would monitor the situation closely. He didn’t announce any direct action, but markets took his words as a warning. A 20-year bond auction on Tuesday failed to attract strong bids, adding to fears the market can’t absorb the mountain of debt the government needs to sell. Investors seem tapped out. The words from Mizuho analysts on Friday summed it up: “The risk of JGBs becoming ‘indigestible’ in the ultra-long term zone remains.” They added that the government might have no choice but to cut back on longer-dated issuance to avoid further disruptions. But even with Friday’s recovery, there’s no sense of relief. Japan is scheduled to auction 40-year bonds again next week. Nobody wants to hold the bag if yields spike further. Shorter-term bonds also moved. The 10-year benchmark JGB yield fell slightly by 1.5 basis points to 1.545%. Two-year and five-year bonds also saw small drops in yield. Those declines followed a broader global move after US Treasuries rallied late in the week. But that didn’t convince anyone in Tokyo that the worst is over. Nippon Life, others report heavy losses The pressure is already visible in Japan’s financial institutions. On Friday, Nippon Life Insurance Co. reported that unrealized losses on its Japanese bond portfolio more than tripled in the fiscal year that ended in March. The company said the paper losses totaled ¥3.6 trillion, or roughly $25 billion, up from the previous year as rising interest rates crushed the value of its holdings. Nippon Life had warned last month it planned to cut back on sovereign debt purchases. Now it’s clear why. Its portfolio is packed with long-duration bonds, mostly 30-year JGBs—the same ones investors rushed to sell this week. The insurer also confirmed it took ¥500 billion in actual realized losses from selling Japanese government bonds during the last fiscal year. Other financial institutions are also getting hit. Norinchukin Bank said Thursday it would be “very cautious” about buying government debt from now on. Sony Life Insurance Co. announced it may start selling some of its bond holdings if domestic rates keep rising. They’re all taking cover before the next hit. Even Nippon Life’s approach has changed. While it ramped up purchases back in April, it now plans to slow things down and reduce its overall bond holdings on a book value basis. They aren’t saying it outright, but the message is clear: these yields are too hot to handle. Long-term crypto trader and hypeman Arthur Hayes took to X to comment on Nippon’s decision, saying, “When the life insurers, who by law can pretty much only buy govt bonds, are getting smoked and need to pull back, the bond market is F**KED. The BOJ is on notice. It’s only a matter of time before they slam even harder in the fiat printing button.” KEY Difference Wire helps crypto brands break through and dominate headlines fast

면책 조항 읽기 : 본 웹 사이트, 하이퍼 링크 사이트, 관련 응용 프로그램, 포럼, 블로그, 소셜 미디어 계정 및 기타 플랫폼 (이하 "사이트")에 제공된 모든 콘텐츠는 제 3 자 출처에서 구입 한 일반적인 정보 용입니다. 우리는 정확성과 업데이트 성을 포함하여 우리의 콘텐츠와 관련하여 어떠한 종류의 보증도하지 않습니다. 우리가 제공하는 컨텐츠의 어떤 부분도 금융 조언, 법률 자문 또는 기타 용도에 대한 귀하의 특정 신뢰를위한 다른 형태의 조언을 구성하지 않습니다. 당사 콘텐츠의 사용 또는 의존은 전적으로 귀하의 책임과 재량에 달려 있습니다. 당신은 그들에게 의존하기 전에 우리 자신의 연구를 수행하고, 검토하고, 분석하고, 검증해야합니다. 거래는 큰 손실로 이어질 수있는 매우 위험한 활동이므로 결정을 내리기 전에 재무 고문에게 문의하십시오. 본 사이트의 어떠한 콘텐츠도 모집 또는 제공을 목적으로하지 않습니다.