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18 July 2024

Japan's 10-year yield nearly flat ahead of BOJ policy meeting

By Reuters

Japan's 10-year government bond was almost flat on Monday ahead of the Bank of Japan's policy meeting towards the end of this week, as investors shrugged off comments from BOJ Governor Kazuo Ueda.
The 10-year JGB yield edged up 0.5 basis point (bp) to 0.465%.
Ueda said on Monday the central bank's inflation forecasts must be "quite strong and close to 2%" in the coming year to consider tweaking yield curve control.
His comments come ahead of a two-day BOJ meeting that kicks off on Thursday, where the board will produce fresh quarterly growth and inflation forecasts.
Market participants expect that the BOJ will not make any changes to policy at the upcoming meeting, while some are still wary of the risk of a surprise, which would follow a policy tweak in December.
Yields on super-long dated bonds rose, with the 20-year JGB yield rising 1 bp to 1.130% and the 30-year JGB yield rising 2 bps to 1.355%.
The 40-year JGB yield rose 2.5 bps to 1.550%.
"Investors were cautions about trading bonds ahead of the BOJ's policy meeting. Yields on super-long ends must have risen due to some supply and demand issues," said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management.
The two-year JGB yield was flat at -0.040% and the five-year yield was unchanged at 0.155%.
Benchmark 10-year JGB futures rose 0.06 yen to 147.77, with a trading volume of 8,638 lots.