Japanese government bond yields rose slightly on Friday, after the European Central Bank announced its biggest-ever interest rate hike and US Federal Reserve Chair Jerome Powell reiterated his commitment to taming down inflation.
The benchmark 10-year JGB was flat, after reaching a yield of 0.245% on Thursday, brushing right up against the Bank of Japan’s policy cap of 0.25%.
“The 10-year yield has risen close to the ceiling of the yield curve control (YCC) range, and there is little room for further increases,” said Katsutoshi Inadome, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
This week the BOJ moved to increase its bond-buying operations in an effort to keep the 10-year yield below the 0.25% cap, as it rose to 0.245% for the first time in seven weeks.
The 20-year JGB yield rose 1 basis point to 0.950% and reached 0.955% earlier in the day for the first time since Jan. 15, 2016.
JGB yields fall after mixed US jobs data
The two-year JGB yield rose 1 basis point to -0.075%, and the five-year yield rose 1 basis point to 0.040%.
The 30-year JGB yield rose 2 basis points to 1.315%, while there was no trading in the 40-year note . Benchmark 10-year JGB futures rose 0.58 point to 150.02.
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