Japanese bonds recovered from yesterday's losses, with the 10-year yield falling back to 2.60%

⑴ Japanese government bonds recovered most of yesterday's losses on Wednesday, with the 10-year yield falling by 4.5 basis points to 2.60%. The 20-year and 30-year yields respectively declined by 6.5 and 7 basis points, to 3.47% and 3.705%. ⑵ JGB futures jumped at the open following overnight gains, breaking above the 128.00 mark and trading at high levels between 128.10 and 128.20, reaching an intraday high of 128.24 in the afternoon. ⑶ Market participants were surprised by the scale of the rebound, as the weak yen is expected to keep import costs elevated, potentially causing the central bank to lag behind the curve. However, domestic investors began to buy in after the central bank meeting. ⑷ In the morning session, some institutions conducted buying operations on the 10-year cash bonds, while regional accounts and life insurance companies also showed buying intentions in the medium-term sector. ⑸ A trader noted that the central bank will conduct bond-buying operations tomorrow, and sellers are relatively cautious ahead of the operation, which has provided some support to the market.