JGBs steady as central bank decisions loom
- The benchmark 10-year JGB yield slipped 0.5 basis point (bp) to 2.980%
TOKYO: Japanese government bonds (JGBs) held steady on Monday as markets headed into the home stretch of key central bank meetings this week.
Here are a few details:
The benchmark 10-year JGB yield slipped 0.5 basis point (bp) to 2.980%.
Yields move inversely to bond prices.
Market participants are focused on the Bank of Japan’s policy meeting on September 17-18, where the central bank is widely expected to raise rates by 25 basis points to 1.25%, following hawkish signals from Governor Kazuo Ueda and firm inflation data.
“Speculation regarding the Bank of Japan’s interest rate hike path is likely to fluctuate considerably, so it will be difficult to take aggressive positions in the government bond market,” Keisuke Tsuruta, a senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, wrote in a note.
US Treasury yields were a touch lower in early trading, with the 10-year around 4.965%, as markets priced in a strong chance of a Federal Reserve hike this week after a hot US inflation report, while a rise in oil prices on Middle East supply risks kept inflation concerns elevated.
The yield on the 40-year JGB, Japan’s longest tenor, fell 0.5 bp to 4.10%.
The two-year JGB yield, the one most sensitive to BOJ policy rates, and the five-year yield both held steady.‑Reuters
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