TOKYO: Japan’s 10-year government bond yield hit a more than nine-year high on Tuesday, crossing a level that had prompted the central bank to intervene in the market earlier this month.
The 10-year JGB yield rose 1 basis point (bp) to 0.660%, its highest since January 2014, tracking US yields higher.
The increasing yield raised speculation that the Bank of Japan (BOJ) would conduct emergency buying, which could send the yen lower. But the central bank had not announced any such move by 0110 GMT.
“The yield rose on the back of the increases in US Treasury yields overnight. It was an orderly move and not driven by speculation, which is why the BOJ did not step in,” said Naoya Hasegawa, senior bond strategist at Okasan Securities.
On Aug. 3, the BOJ conducted unscheduled buying of bonds after the 10-year yield hit 0.655%, its second emergency buying in that week.
The yield on 10-year US Treasury notes hit a high last seen during the Great Financial Crisis in 2007 on Monday, amid a growing view that the Federal Reserve will keep interest rates higher for longer due to a resilient US economy.
Japan’s yields rose across the curve, with the five-year yield rising 1 bp to 0.235%, its highest since Feb. 24.
The 20-year JGB yield rose to 1.4%, its highest level since January 13, before trading at 1.395%, up 1.5 basis points from the previous session.
The 20-year yield rose because investors were still concerned about the weak outcome of the auction last week, Hasegawa said.
The 30-year JGB yield rose 1.5 bps to 1.670%.
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