Bonds may decline, with a sharp rise in US interest rates due to hawkish rate cuts - cautious about Bank of Japan Governor's press conference.

December 19, 2024 7:41 JST (excerpt)
A bond market decline is expected on the 19th. In the USA, the Federal Open Market Committee (FOMC) showed a 'hawkish' stance by reducing the expected number of rate cuts in 2025, following the significant rise in long-term interest rates. Caution towards Bank of Japan Governor Haruhiko Kuroda's regular press conference after the Bank of Japan's monetary policy decision meeting will also weigh on the market.
Small Yu Masayuki, Executive Fund Manager of the Second Mitsubishi UFJ Asset Management Bond Management Department, expects to continue the trend of a significant rise in long-term interest rates in the USA following the FOMC, and the decline in yen bond futures in overnight trading. The Bank of Japan meeting is expected to be unchanged, and it is anticipated that after the results are announced, the market may rebound temporarily, but thereafter, with caution towards the Bank of Japan Governor's press conference, the upside may become heavy.

Also, the Bank of Japan Governor's press conference is expected to be a challenging communication. It was mentioned that it will be interesting to see if there will be a change from the previous information dissemination that left expectations for a January rate hike while avoiding definitive statements.