Japan bond yields rise on faster BOJ rate hike bets, inflation concerns
TOKYO: Japanese government bond (JGB) yields rose on Wednesday as traders increasingly expected the Bank of Japan to raise rates next month, while a rise in crude oil prices amid renewed uncertainty over the Middle East added to inflation concerns. Markets were also focused on the US Consumer Price Index, due later on Wednesday, for clues on the direction of Federal Reserve interest rates. The…
Japanese government bond yields surged on Wednesday as traders anticipated the Bank of Japan would hike rates next month, amid inflation worries fueled by rising crude oil prices. The benchmark 10-year JGB yield jumped 4.5 basis points to 2.850%, with the 5-year yield reaching a record high of 2.110%. The 2-year yield, most sensitive to Bank of Japan policy, climbed 3.5 bps to 1.645%, the highest since May 1995.
Traders now price in a 78% chance of a September rate hike, up from 66% on Monday, according to Tokyo Tanshi data. The shift follows a joint currency intervention by Japan and the US to support the yen and a hawkish tone from the BOJ's July meeting summary.
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