Japan's 10-year government bond yield jumped to a three-decade high on Monday, tracking a slide in global debt as inflation pressures mounted and expectations around central bank interest rate hikes solidified.
Here are a few details:
- The benchmark 10-year JGB yield climbed 5 basis points to 2.925 percent, a level last seen in September 1996. The yield has risen for six consecutive sessions, marking the longest streak in more than a month. Yields move inversely to bond prices.
- U.S. Treasuries fell on Friday after an initial rally driven by weaker-than-expected retail sales data faded, while persistent Middle East tensions kept investors on edge with crude prices turning higher. Euro zone yields also ended higher last week.
- "At present, a bearish outlook on government bonds is spreading globally, and the upward trend in yields is intensifying, which is a cause for concern," Keisuke Tsuruta, a senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, said in a note.
- "On the domestic front, uncertainty surrounding the Bank of Japan’s pace of interest rate hikes and its terminal rate remains a key concern."
- The two-year yield, the one most sensitive to Bank of Japan policy rates, added 3.5 bps to 1.685 percent, the highest since May 1995. The five-year yield rose 2 bps to 2.155 percent, set for a record close.
- The yield on the 30-year JGB advanced 5 bps to 4.06 percent, set for its highest close since July 7. The yield on the 40-year JGB, Japan's longest tenor, increased 4 bps to 4.115 percent, poised for its highest close since May 25.
- Data released on Monday showed the Japanese economy expanded at an annualised 1.1 percent in the April-June quarter, versus a median forecast of 2.0 percent annualised growth. Private consumption was flat and capital spending fell 1.2 percent in the quarter.
Reuters
