Japan’s benchmark 10-year government bond yield climbed to its highest level in three decades on Tuesday as rising overseas yields and growing expectations of a Bank of Japan (BOJ) rate hike pushed borrowing costs higher.
The 10-year Japanese government bond (JGB) yield rose 2.5 basis points to 2.945% in early trading, its highest level since September 1996. Other cash bonds had yet to trade as of 0000 GMT.
The move came as expectations build that the BOJ could raise interest rates at its next policy meeting in September, with recent comments from central bank officials taking a more hawkish tone.
Reuters and other media have also reported that the BOJ’s policy board could pursue a more aggressive tightening path than it has so far, adding to pressure on Japanese bond yields.
Rising global bond yields have further added to the upward pressure, with inflation concerns intensifying as oil prices climb while Middle East peace talks remain deadlocked.
Bond yields move inversely to prices, meaning the rise in the 10-year yield reflects a decline in JGB prices.
Meanwhile, benchmark 10-year JGB futures fell 0.19 yen to 125.97 yen.
The latest move puts the benchmark yield within sight of the 3% level, as investors weigh the prospect of further monetary policy tightening against persistent inflationary pressures.
Reuters
