JGB yields rise on inflation worries, BOJ's September hike bets

Japanese government bond (JGB) yields rose on Monday as higher oil prices fuelled inflation concerns, while investors weighed the likelihood of a Bank of Japan interest-rate hike in September.

Here are a few details:

• The benchmark 10-year JGB yield rose 1.5 basis points (bps) to 2.810 percent. Yields move inversely to bond prices.

• The two-year yield, most sensitive to BOJ's policy, was up 1 bp at 1.615 percent, its highest level since May 1995.

• The five-year yield rose to as high as 2.09 percent, matching a record high marked last week, and was last up 1 bp to 2.085 percent.

• "Inflation fears grew after oil prices rose," said Miki Den, senior Japan rate strategist at SMBC Nikko Securities.

• Oil prices rose, supported by uncertainty over the reopening of the Strait of Hormuz, as Iran said a deal with Oman defining new shipping lanes was in its final stages but insisted the US must still meet other conditions.

• The yen has given up some intervention-driven gains, which also fuelled concerns about rising inflation, Den added.

• The Japanese currency was last down 0.27 percent against the US dollar at 158.195.

• The BOJ's case for a September rate hike strengthened after a growing chorus of policymakers argued for a more forceful response to mounting inflation risks, a summary of opinions at their July meeting showed on Monday.

Reuters

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