TOKYO: Japanese government bond yields rose on Friday as Bank of Japan Governor Kazuo Ueda signalled his readiness to continue policy tightening if inflation and economic growth remained on track.
The 10-year JGB yield rose 2 basis points to 0.89%. It had hit 0.895% before Ueda’s remarks. The two-year JGB yield rose 2 bps to 0.375%.
The five-year yield rose 2 bps to 0.505%. Ueda reaffirmed his resolve to raise interest rates if inflation stayed on course to sustainably hit the 2% target, but warned financial markets remained unstable.
“His remarks were in line with what the BOJ said in its outlook report at the end of July.
The BOJ’s stance to raise rates has not been changed,“ said Miki Den, senior Japan rate strategist at SMBC Nikko Securities.
The yields rose before Ueda’s speech because the market had priced in the comments to be issued from Ueda, Den said.
Ueda is speaking at a special session of Japan’s parliament and is discussing the central bank’s decision to raise interest rates last month in a sudden hawkish turn.
Japan’s 2 year bond yield hits 13-year high as BOJ chief hints chance of another rate hike
The market saw the BOJ’s move as a factor in the collapse of the Japanese stock market earlier this month, where the Nikkei posted its biggest single-day drop since the 1987 Black Monday sell-offs on Aug. 5.
Sentiment improved after BOJ Deputy Governor Shinichi Ueda said the central bank would not hike rates when markets were unstable.
Comments
Comments are closed for this article.