Japan Bond Market Liquidity Hits Record Low Amid Intensifying Sell-Off

• Japan's government bond market liquidity has fallen to record lows due to an intense sell-off and perceived buyers' strike.
• The JGB Liquidity Index reached an all-time high on Tuesday, indicating significant deviation from anticipated yield levels.
• Long-term yields, particularly 30- and 40-year bonds, surged over 25 basis points after PM Sanae Takaichi's tax cut pledge.
• Japanese insurers sold a record amount of super-long bonds last month, raising concerns about a lack of natural buyers.
• Foreign investors now account for over 65% of monthly cash JGB transactions, a significant increase from 12% in 2009.

Why It Matters: Japan's bond market faces unprecedented liquidity challenges as a major sell-off drives yields higher.