TOKYO: Japanese government bond yields were little changed on Tuesday, with traders waiting for fresh clues on how soon the Bank of Japan will raise interest rates again and when the US Federal Reserve will cut them.
The 10-year JGB yield rose 0.5 basis point (bp) to 0.735%, succumbing to pressure from an overnight rise in US Treasury yields.
However, 10-year JGB futures were little changed at 145.56.
The five-year JGB yield ticked down 0.5 bp to 0.375%. Traders are watching for signs of when the BOJ might start to taper its bond-buying stimulus after the central bank exited negative interest rate policy a week ago.
Meanwhile, the Fed last week stuck to its view for three quarter-point rate cuts this year, and the market is now waiting on key US inflation data this Friday for hints at how early the first cut will be.
“Japanese yields are going to depend on where US Treasury yields are and the amount of bond purchases that the BOJ is going to conduct,” said Shoki Omori, chief Japan desk strategist at Mizuho Securities.
Japan JGBs hemmed in by BOJ’s actions and words
“There’s going to be ups and downs depending on US data, (but) until the BOJ starts to reduce bond purchases, JGBs are going to trade in ranges.”
The two-year JGB yield was flat at 0.195%. The 20-year JGB yield was unchanged at 1.500%, while the 30-year yield fell 0.5 bp to 1.810%.
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