JGB yields jump to track US yields higher

TOKYO: Japanese government bond (JGB) yields jumped on Thursday, tracking yields on US long bonds, which rose on worries that the Federal Reserve may fall behind the curve in coping with inflation.  

Here are a few details:

The 10-year JGB yield rose 5.5 basis points (bps) to 2.800%.

The five-year yield rose 4.5 bps to 2.025%. Yields move inversely to bond prices. Yields on the 30-yearUS Treasuries climbed to 19-year highs in Asia on Thursday as doubts over the Fed’s resolve to rein in inflation prompted investors to seek more insurance against inflation risks.

Japan’s two-year yield was flat at 1.47% after an auction for bonds with the same maturity witnessed a moderately firm outcome.

“The auction received decent demand because the yield level was high, and that boosted appetite from banks,” said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.

The market is gauging the impact on JGBs of the massive earthquake that hit Japan’s southern Kumamoto Prefecture earlier this week.

Yields could go either way, as the damage could lead Japan to issue more bonds to finance reconstruction, while supply chain disruptions could hurt the economy, said Inadome.

The 30-year yield rose 3 bps to 3.960%. ‑Reuters