TOKYO: Japan’s 20-year government bond yield hit its highest level in more than eight years on Wednesday, even as the Bank of Japan conducted emergency bond buying operations for a fourth straight session to contain elevated yields.
The 20-year JGB yield jumped 4 basis points to 1.340%, its highest since October 2014.
The 30-year JGB yield rose 4 basis points to 1.645, its highest since Oct. 25.
The BOJ conducted unscheduled bond buying operations earlier in the day, targeting short-term to super-long maturities.
The central bank has conducted similar operations almost every session since it jolted the market on Dec. 20 by widening the allowance band around its benchmark 10-year government bond yield target to 0.5% from 0.25%.
“The BOJ widened the yield band in order to boost liquidity but the market has become less liquid,” said Keiko Onogi, a senior JGB strategist at Daiwa Securities.
“Market participants are cautions about the BOJ’s next move, so they are not able to conduct normal trading.”
The 10-year JGB yield rose 4.5 basis points to 0.455% ahead of an auction of notes of the same maturity on Thursday.
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The 40-year JGB yield rose 3.5 basis points to 1.910%.
Yields on shorter-dated notes fell, with the two-year JGB yield falling 0.5 basis point to 0.025%.
The five-year yield fell 1 basis point to 0.220%. Benchmark 10-year JGB futures fell 5 yen to 145.41, with a trading volume of 16,898 lots.
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