TOKYO- Japan’s 10-year government bond yield rose to its highest in two weeks on Monday as investors tried to gauge the Bank of Japan’s stance on its ultra-low rate policy.
The 10-year JGB yield inched up 0.5 basis points to 0.400 percent, its highest since June 19.
“BOJ Governor (Kazuo) Ueda has made some comments that could hint that the central bank may tweak its policy but it is hard to decide whether we can take those comments seriously,” said Hiroshi Namioka, chief strategist and fund manager, T&D Asset Management.
Last week, Ueda said the central bank would see good reason to shift monetary policy if it became “reasonably sure” that inflation would accelerate into 2024 after a period of moderation.
The central bank is under increasing pressure to exit from the massive stimulus program as data released on Friday showed core inflation in Japan’s capital perked up in June and remained above the central bank’s 2 percent target for the 13th month.
The yen’s weakness against the dollar could also prompt the BOJ to alter its policy, Namioka said.
Japanese authorities are facing renewed pressure to combat a continued fall in the yen due to market expectations that the BOJ will keep interest rates ultra-low.
The 20-year JGB yield was also flat at 0.995 percent. The 30-year JGB yield rose 0.5 basis points to 1.245 percent. – Reuters
