TOKYO: Japan’s 10-year government bond yield hit a near 16-year high on Thursday after a sharp sell-off in German bonds weighed on sentiment. The 10-year JGB yield jumped 6 basis points (bps) to 1.5%, its highest level since June 2009 in early trade.
A major overhaul to German government borrowing triggered the biggest sell-off in the country’s debt since the late 1990s.
German 30-year yields - the rate the government pays to borrow over the very long term - rose by almost a quarter of a percentage point in early trading, which would have marked their largest rise since October 1998.
Strategists in Japan said there have not been any market-moving cues for the yields domestically.
JGB yields march higher with focus on 30-yr bond auction
German political parties agreed to a 500 billion-euro ($534.75 billion) infrastructure fund and, crucially, an overhaul in borrowing limits that economists billed as “a really big bazooka”.
Japan’s five-year bond yield rose 5 bps to hit 1.12%, its highest since October 2008.
The 30-year bond yield jumped 8 bps to 2.485%, its highest since July 2008.
The 40-year bond yield rose 1 bp to 2.845%.
Bonds with other maturities have not been priced yet.
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