Japan bond yields hold near multi-decade highs before 40-year auction
TOKYO: Japanese government bond (JGB) yields held near multi-decade highs on Tuesday as inflation pressures set the scene for an auction of the market's longest-dated tenor.
Tokyo, Japan: Japanese government bond yields pushed near multi-decade highs before a 40-year auction on Tuesday, as inflation pressures loomed. Key points:
- The benchmark 10-year JGB yield climbed 0.5 basis point to 3.090%, close to the 30-year high of 3.115% seen last week. Yields move oppositely to bond prices.
- Global bond markets faced pressure, with US Treasury yields hitting multi-year highs due to inflation concerns from rising oil prices and expectations of additional Federal Reserve rate hikes.
- Japan's Finance Ministry will sell around 300 billion yen (US$1.91 billion) in 40-year JGBs later in the day, followed by a two-year note auction on Wednesday.
- Yields on newly issued 40-year bonds are near record levels, with some anticipated demand from insurance firms and foreign investors, as noted by senior economist Takayuki Miyajima from Sony Financial Group.
- Speculation about further Bank of Japan rate hikes, expectations of a higher terminal rate, and worries about fiscal expansion continue to drag down bond market sentiment.
- The 40-year JGB yield remained flat at 4.225%, while the 20-year and 30-year yields stayed steady at 3.915% and 4.170%, respectively.
- The two-year yield, most affected by BoJ policy rates, held steady at 1.965%. The five-year yield remained unchanged at 2.420%, slightly below its recent record high on Monday.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
