JGB yields rise as BOJ official makes case for faster rate hikes
- The benchmark 10-year JGB yield rose 5 basis points (bps) to 2.93%
TOKYO: Japanese government bond (JGB) yields rose on Thursday as escalating Middle East tensions pushed oil prices higher, with gains gathering pace after a Bank of Japan official struck a hawkish tone on further policy tightening.
Here are a few details:
The benchmark 10-year JGB yield rose 5 basis points (bps) to 2.93%. The 2-year yield, which is particularly sensitive to monetary policy expectations, added 1.5 bps to 1.845%.
Yields moved a step higher after BOJ board member Kazuyuki Masu said in a speech that the bank may be forced to raise interest rates rapidly if inflation accelerates, as Japan’s financial conditions remain accommodative.
The BOJ is widely expected to raise rates on Friday next week, and market players will watch closely for clues on the pace of further tightening.
“Our basic expectation is that (BOJ Governor Kazuo) Ueda will take a hawkish line in his post-meeting press conference while carefully explaining the need to proceed with further rate hikes,” Mizuho Securities senior market economist Yusuke Matsuo wrote in a report.
“There is, however, a risk that such communications could be interpreted as more dovish than anticipated.”
Iran said on Wednesday it had attacked 10 ships near the Strait of Hormuz after the US sank five Iranian oil tankers, in the biggest wave of attacks on shipping by both sides since the start of the six-month-old war.
Brent crude rose above $100 a barrel as a result, for the first time since late July.
Japan’s 20-year yield climbed 5 bps to 3.75%, and the 30-year yield advanced 5.5 bps to 4.01%.
The 5-year yield added 3 bps to 2.25%.‑Reuters
Comments