Will Japanese Government Bond Yields Continue Their Rising Trend?

■ Japanese 10-year government bond yields have rebounded due to inflation concerns stemming from high oil prices and expectations of worsening supply and demand in the bond market. 

■ While the Bank of Japan is likely to maintain its current interest rate, the market is watching closely to see if it signals further hawkish rate hikes. 
 
10-year government bond prices fell (yields rose). At the beginning of the week, yields initially declined due to uncertainty surrounding the Middle East situation and a cooling of market expectations for a rate hike at the Bank of Japan's April monetary policy meeting. Mid-week, however, yields rose again due to persistent inflation concerns stemming from high oil prices, coupled with strong selling pressure on long-term bonds as revealed by the Bank of Japan's bond-buying operations on the 23rd. 

 
Will the 10-year government bond yield continue its upward trend? Besides inflation concerns triggered by rising oil prices, the concentrated issuance of government bonds around the Golden Week holiday also raises concerns about a deteriorating supply-demand relationship, potentially putting upward pressure on yields. The Bank of Japan's monetary policy meeting on the 27th and 28th will most likely keep interest rates unchanged, but the market is watching whether the governor's press conference will signal a continued rate hike due to concerns about "falling behind the curve" (policy actions being slower than changes in the situation), thus releasing a hawkish signal (actively promoting rate hikes).