Japan's 40-year bond recovered after Finance Minister Satsuki Katayama urged market stability. Her comments followed a sharp selloff that drove yields to record highs, rattling investors and signaling growing concerns about monetary policy direction.

The bond market reaction reflects broader tensions around the Bank of Japan's ultra-low interest rate stance. Investors have been testing the limits of yield curve control, leading to increased volatility in long-duration securities.

Market participants are watching for further policy signals from Japanese authorities. Any shift toward tighter monetary policy could trigger additional volatility across global fixed-income markets, particularly affecting pension funds and insurance companies heavily invested in long-term Japanese debt.