TOKYO: Japanese government bond yields rose on Tuesday as investors awaited details on the Bank of Japan’s plan to reduce its monthly bond buying.
The 10-year JGB yield rose 2.5 basis points (bps) to 1.085%.
The five-year yield rose 1.5 basis points to 0.605%.
“Until the BOJ announces the details on how it will cut its bond-buying amounts, the yields will be on upward trend,” said Miki Den, a senior Japan rate strategist at SMBC Nikko Securities.
At a policy meeting last month, the BOJ decided to announce in July a detailed plan on how it plans to reduce its huge bond buying and scale back its nearly $5 trillion balance sheet.
Japan bond market participants expect the central bank to trim bond purchases by roughly $100 billion in the first year under a quantitative tightening (QT) plan set for release this month, according to a survey conducted by Reuters.
On Tuesday, the market witnessed a relatively strong outcome of an auction for 10-year JGBs, with its lowest bidding price being higher than market expectations.
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The yields on bonds with super long maturities rose ahead of an auction for 30-year bonds later in the week, as investors sold the bonds to buy them back at the auction, Den said.
The 20-year JGB yield rose 2.5 bps to 1.92%.
The 30-year JGB yield rose 1.5 bps to 2.255%.
The 40-year JGB yield rose 1 bp to 2.390%.
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