Global Market: JGB yields ease as markets weigh BOJ rate-hike outlook

Japanese government bond yields fell on Wednesday, tracking a decline in global bond yields, even as a Bank of Japan policymaker signalled support for further interest-rate increases, according to a report by Reuters.

The benchmark 10-year JGB yield fell 1 basis point to 3.085%. Bond yields move inversely to prices.

U.S. Treasury yields eased on Tuesday after a sharp selloff in the previous session had pushed long-term borrowing costs to multi-decade highs, providing some support to Japanese government bonds.


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New BOJ policymaker Ayano Sato backed raising interest rates in several stages, the Kyodo news agency reported, according to Reuters. Sato was among two policymakers who dissented when the central bank raised rates in September.

Market participants appeared divided over the implications of Sato's comments for the BOJ's policy outlook and the bond market.

The report stated that some investors viewed Sato's remarks as less dovish than previously expected, while others saw little change in her stance. Investors also remained split over how further BOJ rate increases would affect longer-term bond yields.

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In theory, higher policy rates could push the 10-year JGB yield higher. However, expectations of tighter policy could also ease concerns that the BOJ is lagging behind inflation pressures, potentially limiting upward pressure on longer-term yields, the report stated.

The two-year JGB yield edged down 0.5 basis point to 1.92%, while the five-year yield was unchanged at 2.390%.

The 30-year JGB yield fell 3 basis points to 4.205%.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)