TOKYO: Japanese government bond yields rose on Monday amid hawkish undertones in a summary of opinions from this month’s Bank of Japan (BOJ) meeting, while the sliding yen increased pressure on the central bank to tighten monetary policy.
The 10-year JGB yield rose 2 basis points (bps) to 0.995% as of 0520 GMT, the highest level since June 12. Benchmark 10-year JGB futures fell 0.11 yen to 143.52.
The yen dropped as low as 159.94 per dollar for the first time since April 29, when its plunge to a 34-year trough of 160.245 provoked Japan’s finance ministry to spend some 9.79 trillion yen ($61.35 billion) to support it.
Finance Minister Shunichi Suzuki and top currency diplomat Masato Kanda each warned on Monday that officials stand ready to respond as appropriate to excessive currency swings.
Meanwhile, a summary of the latest BOJ gathering this month showed that policy makers debated the chance of a near-term interest rate increase, with one person calling for a hike without delay.
“The summary of opinions was pretty hawkish: very constructive on near-term rate hikes, and worried about yen weakness affecting inflation expectations,” said Naka Matsuzawa, chief macro strategist at Nomura.
Japan’s 2 year bond yield hits 13-year high as BOJ chief hints chance of another rate hike
“If the Ministry of Finance intervenes in the currency market, that will put additional presure on the BOJ.”
The 20-year JGB yield climbed 2.5 bps to 1.83%, and the 30-year yield jumped 3 bps to 2.175%.
The two-year yield rose 0.5 bp to 0.31%. The five-year yield was flat at 0.54%.
Comments