Japan’s 10-year bond yield hits 3-decade high as inflation, central bank pressures mount
The yield has risen for six consecutive sessions, marking the longest-winning run in more than a year.
On August 17, Japan's 10-year government bond yield reached a three-decade high, reflecting rising inflation pressures and growing expectations of central bank interest rate hikes. The benchmark 10-year Japanese government bond (JGB) yield climbed five basis points to 2.925 percent, the highest level since September 1996. This surge in yields occurs as bond prices fall, showing a trend of increasing yields globally.
Yields on other maturities, including the two-year, five-year, 30-year, and 40-year JGBs, also hit record highs, underscoring the intensifying upward trend across the market. The yield on the two-year JGB, most sensitive to Bank of Japan policy rates, rose 3.5 basis points to 1.685 percent, highest since May 1995. The Bank of Japan's potential pace and terminal rate of interest hikes remain a key source of uncertainty domestically.
Analysts express concern over a bearish outlook spreading globally, with investors wary of the potential impact on government bond prices.
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