JGB yields rise as BOJ official makes case for faster rate hikes
TOKYO: Japanese government bond (JGB) yields rose on Thursday as escalating Middle East tensions pushed oil prices higher, with gains gathering pace after a Bank of Japan official struck a hawkish tone on further policy tightening. Here are a few details: The benchmark 10-year JGB yield rose 5 basis points (bps) to 2.93%. The 2-year yield, which is particularly sensitive to monetary policy…
Japanese government bond (JGB) yields climbed on Thursday amid mounting Middle East tensions and a surge in oil prices, following a dovish statement from a Bank of Japan official. The benchmark 10-year JGB yield climbed 5 basis points to 2.93%, while the 2-year yield, more sensitive to monetary policy expectations, rose 1.5 bps to 1.845%.
BOJ board member Kazuyuki Masu said at a speech that the central bank may be compelled to raise interest rates swiftly if inflation surges, given Japan's accommodative financial conditions. The BOJ is expected to hike rates on Friday, with market participants closely monitoring the tone of Governor Kazuo Ueda's post-meeting press conference for hints on the speed of future tightening.
Mizuho Securities senior market economist Yusuke Matsuo noted a potentially dovish interpretation of Ueda's remarks. Iran announced on Wednesday that it had targeted 10 vessels near the Strait of Hormuz in retaliation for the US sinking five of its oil tankers, marking the most significant wave of attacks on shipping since the six-month-old war commenced.
Brent crude prices surged above $100 a barrel for the first time since late July. Japan's 20-year yield increased 5 bps to 3.75%, and the 30-year yield climbed 5.5 bps to 4.01%. The 5-year yield gained 3 bps to 2.25%.
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