TOKYO: Japanese government bond (JGB) yields rose on Tuesday, tracking US peers higher, as investors braced for a surprise from central bank meetings in the US and Europe, as well as a series of overseas data releases.
The 10-year JGB yield rose 1.5 basis points (bps) to 0.415% and the five-year JGB yield rose 1.5 bps to 0.120%.
“Overseas yields may move during Japan’s long weekend with the FOMC (US Federal Open Market Committee), ECB (European Central Bank) meeting and US jobs data,” said Takeshi Ishida, strategist at Resona Holdings.
“Investors are bracing for a surprise and adjusted their positions, as they saw a surprise from Australia’s central bank today.”
The Reserve Bank of Australia (RBA) on Tuesday stunned markets by raising its cash rate 25 basis points when traders had looked for an extended pause.
The Fed and ECB decisions, along with the US jobs data all come when Japan will be observing the Golden Week holidays, which run from Wednesday through to the end of the weekend.
JGB yields stabilise near one-month lows in BOJ aftermath
The 20-year JGB yield rose 1.5 bps to 1.030% and the 30-year JGB yield rose 2 bps to 1.280%.
JGB yields sharply fell on Friday after the Bank of Japan (BOJ) maintained its ultra-loose policy unchanged, with yields on super-long notes tanking around 10 basis points.
“The super-long sector has been the standout performer in the immediate wake of the monetary policy statement, but some allowance probably also needs to be made for the impact of end-of-month portfolio rebalancing,” Morgan Stanley analyst wrote in the notes dated on April 30.
The 40-year JGBs have not been traded as of 0530 GMT and the yield was flat at 1.455%.
The two-year JGB yield rose 0.5 bp to -0.040%. Benchmark 10-year JGB futures fell 0.12 yen to 148.4.
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