TOKYO: Japan’s 10-year government bond yield crossed 1% for the first time in more than three months on Thursday, tracking US yields higher, while markets were cautious that the Bank of Japan (BOJ) may raise rates amid a weaker yen.
The 10-year JGB yield rose 3 basis points to 1.01%, its highest since Aug. 1.
US Treasury yields rose to multi-month highs overnight as Donald Trump’s presidential election victory ignited bets on economic policy shifts that could boost deficits and inflation.
Trump’s victory unleashed a massive rally in the dollar, drove stocks to record highs and punished bond prices.
“A weaker yen drives speculation that the BOJ may increase rates, which weighs on bond prices,” said Takahiro Ootsuka, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
The US dollar reached a four-month high of 154.7 yen overnight, before last trading down 0.36% at 154.08.
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A weaker-than-expected auction of 10-year bonds earlier on Thursday also hurt sentiment, Ootsuka said.
The two-year JGB yield rose 2.5 bps to 0.5%, its highest since December 2008, while the five-year yield rose 3.5 bps to 0.645%, its highest since Aug. 1.
The 20-year JGB yield rose 3.5 bps to 1.845% and the 30-year JGB yield rose 3 bps to 2.255%.
The 40-year JGB yield rose 3.5 bps to 2.595%.
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