TOKYO: Japanese government bond yields ticked higher on Friday in a subdued end to the most volatile year since the global financial crisis, but with yields set to end only marginally higher than where they started.

The 10-year JGB yield rose 3.5 basis points (bps) to 0.62% as of 0613 GMT, tracking a rebound overnight in US Treasury yields from the five-month lows reached on mounting bets for a Federal Reserve pivot to rate cuts early next year.

Japan’s benchmark yield has swung from as low as 0.24% in March to a decade-high 0.97% in November in a year punctuated by sharp swings in wagers on when the Bank of Japan (BOJ) will start to unwind stimulus.

The 73-basis-points range is the widest since a 74-basis-points swing in 2008.

JGB yields fall as BOJ’s summary offers no clue for policy shift

For the year though, the Japanese 10-year yield is set to end with a 21 bps rise, dwarfed by the previous year’s 34 bps increase.

Still, that would mark a fourth annual advance as Japan emerges from deflation, and the exit door for monetary stimulus increasingly comes into view.

Although bets have receded for an end to negative interest rates as soon as the January policy meeting because of persistent dovish messaging from the central bank, many analysts and investors expect a change in policy by April.

“The main reason that the BOJ is currently avoiding taking decisive action on the timing of the lifting of negative rates is less due to the Japanese economy and wage conditions than (due) to the uncertainty around the US economy and monetary policy conduct,” Naka Matsuzawa, chief Japan macro strategist at Nomura Securities, wrote in a report.

“It could be that the BOJ is being put off by the sudden dovish pivot at the December FOMC (Federal Open Market Committee) and market participants’ rush to price in rate cuts that go beyond this message.”