TOKYO: Japanese government bond (JGB) yields edged up on Thursday, with moves subdued as market participants awaited remarks from the heads of both the Bank of Japan and the Federal Reserve on Friday.
Mid- and long-term yields rose as investors continued to adjust positions amid easing fears of a US recession.
But the moves were cautious ahead of BOJ Governor Kazuo Ueda’s appearance before Japan’s parliament on Friday, where he will discuss the bank’s decision last month to raise interest rates.
The benchmark 10-year JGB yield was up just 0.5 basis point (bp) at 0.87% as of 0415 GMT, while 10-year JGB futures fell 0.14 yen to 144.84 yen.
Markets will be watching to see whether Governor Ueda changes his hawkish stance given the recent market turmoil, said Yurie Suzuki, a market analyst at Mizuho Securities.
“There’s a strong sense of uncertainty around that… It’s difficult to make a move under these circumstances.”
The BOJ’s hawkish turn is seen as a contributing factor in the biggest single-day rout in Japanese equities since the 1987 Black Monday crash.
Suzuki said some market participants are again considering the possibility of another rate hike in Japan within the year after the BOJ released research papers this week that supported the argument that broadening inflationary pressures warrant raising rates steadily.
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Fed Chair Jerome Powell will speak on Friday at the Jackson Hole Economic Symposium, with the markets expecting the Fed to begin cutting rates in September.
Global investors will be listening for hints on the size of the rate cut and the policy outlook.
Elsewhere on the curve, the two-year JGB yield rose 1.5 bps to 0.36%, and the five-year yield ticked up 1 bp to 0.485%.
The 20-year JGB yield and the 30-year JGB yield were both flat at 1.7% and 2.08%, respectively.
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