Japan’s 10-year bond yields near one-year high on rate hike concerns

TOKYO: Japan’s 10-year government bond yields hit a nearly one-year high, as investors became cautious about possible rate hikes by the country’s central bank.

Reuters reported Bank of Japan policymakers are debating how soon they can start telegraphing an eventual interest rate hike, which could come even before inflation hits the bank’s 2% target.

“The market has reacted to the report, which suggested possible normalization of the monetary policy of the Bank of Japan,” said Makoto Suzuki senior bond strategist at Okasan Securities. The 10-year JGB yield rose 2.5 basis points (bps) to 0.150%, after touching 0.156% earlier, its highest since March 2021.

The 20-year JGB yield rose 2.5 bps to 0.530%. The 30-year JGB yield gained 1.5 bps to 0.720%. The 40-year JGB yield rose 1 basis point to 0.755%.

Yields on shorter-ended bonds also gained, with the two-year JGB yield rising one basis point to minus 0.075% and the five-year yield jumping 2.5 bps to minus 0.015%. Benchmark 10-year JGB futures fell 0.40 point to 150.66, with a trading volume of 24,241 lots.