Japanese Government Bond Yields Rise as Safe-Haven Buying Triggered by AI Sell-Off Pauses

on November 9, Japanese government bond yields rose on Monday, recovering some of last week’s losses. A large-scale sell-off of AI-related stocks last week fueled demand for safe-haven assets. The 5-year Japanese government bond yield rose by 5.5 basis points to 2.1%, while the 10-year yield climbed by 6.5 basis points to 2.7%. Amid a sharp selloff in tech stocks late last Friday, investors flocked to traditional safe-haven assets, pushing Japanese government bond yields to multi-month lows.

"Uncertainty surrounding AI-related investments remains pronounced, and the effects of risk aversion require close monitoring," wrote Keisuke Tsuruta, senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, in a research note. "However, given the rapid decline in yields toward the end of last week, we also note the potential for a short-term rebound."