PANews reported on May 21 that Japan's ultra-long bond market has recently suffered a "bloodbath" and yields have continued to soar to record highs. Yesterday, the Bank of Japan released briefing materials used in its meetings with bond market participants, which mentioned that the liquidity and demand for ultra-long bonds fell as the main reasons, although there were different opinions. Some market participants urged the Bank of Japan to increase its purchases of ultra-long bonds or terminate its tapering program for bonds of this maturity in view of the current market crash. Most people agree that slowing down the pace of tapering may ease market pressure at a time when debt issues are gaining increasing attention. The Japanese Prime Minister's recent remarks that his fiscal situation is "worse than Greece" have undoubtedly exacerbated market concerns. Some say that these sharp fluctuations may trigger chain reaction risks and affect global markets because they will prompt Japanese investors to withdraw funds back home. The Bank of Japan will review its quantitative tightening plan at its next policy meeting on June 16-17. If the market begins to see that the central bank has taken certain intervention measures or released signals of changing its tapering plan, it may put pressure on the yen exchange rate.

Currently: Japan's 30-year government bond yield has risen to 3.184%; Japan's 40-year government bond yield has risen to 3.658%.