On Wednesday, Japanese government bond yields experienced a significant decline as investors seized the opportunity to purchase bonds at the beginning of the new fiscal year. The five-year yield fell 5.5 basis points to 2.30%, while the 40-year yield dropped 12 basis points to 3.795%. This shift was influenced by a more optimistic outlook regarding the de-escalation of the Middle East conflict, particularly following statements from U.S. President Donald Trump and Secretary of State Marco Rubio suggesting that the end of the war in Iran may be near. Domestic banks are reportedly engaged in rebuilding their portfolios, contributing to the positive market sentiment. Last week, bond yields surged due to fears of inflation driven by rising oil prices and the potential for early interest rate hikes by the Bank of Japan (BOJ). The market's mood shifted on Wednesday, with the 20-year JGB yield slipping 7.5 basis points to 3.205% and the 30-year yield down 10.5 basis points to 3.61%. However, concerns linger about the thin trading in the super-long bond sector, indicating a potential lack of investor support, which could lead to unexpected volatility in the future.