Business Recorder🇯🇵
Japanese government bonds slide on inflation signs, BOJ rate-hike bets
BondsInterest RatesInflation
TOKYO: Japanese government bonds (JGBs) fell on Monday, driving yields back towards multi-decade highs, as inflation concerns and expectations for further central bank tightening spurred selling. Here are a few details: The benchmark 10-year JGB yield climbed 2 basis points (bps) to 3.095%, poised for its highest close since August 1996. Yields move inversely to bond prices. The 2-year yield, the one most sensitive to Bank of Japan policy rates, advanced 1.5 bps to 1.950%, matching a 31-year peak seen last week. A key gauge of Japan’s service-sector inflation rose in August at the fastest annual pace in more than two years, data showed, highlighting price pressures that may justify more interest rate increases. “Given that major developed economies share factors that fuel inflation, such as fiscal expansion and high commodity prices, it’s possible that expectations will grow that the Bank of Japan will eventually be required to tighten monetary policy as well,” Ataru Okumura, a senior rate strategist at SMBC Nikko Securities, said in a note.