SINGAPORE: Yields on Japanese government bonds rose on Monday, with those on five-year notes touching an eight-year high as speculation mounted that the Bank of Japan (BOJ) will tweak its ultra-easy monetary stance.

The Japanese government next year will consider revising a joint statement it signed with the BOJ a decade ago committing the central bank to hitting a 2% inflation target as soon as possible, sources told Reuters.

Markets have been rife with speculation the BOJ could tweak the yield curve control (YCC) - a policy combining a negative short-term rate target with a 0% cap on the 10-year bond yield - when governor Haruhiko Kuroda’s second, five-year term ends in April.

Investor focus will firmly be on BOJ policy decision due on Tuesday.

“I doubt there is any significant change in stance, but the risk of a tweak is still not ruled out,” Christopher Wong, currency strategist at OCBC in Singapore.

“The probability of a policy shift is likely higher for first half 2023.”

The five-year yield rose 1.5 basis points to 0.140%, its highest since February 2015, while the 20-year JGB yield climbed 4 basis points to 1.175%, the highest level in more than a month.

Japan’s 10-year bond yield stays at top of BOJ ceiling

Benchmark 10-year JGB futures dropped 12 ticks to 147.86.

The 30-year JGB yield rose 5 basis points to 1.520%.

The two-year JGB yield advanced 1.5 basis points to -0.010%.