TOKYO – Japan’s 10-year government bond yield rose on Tuesday, as investors remained cautious about a possible surprise tweak by the Bank of Japan to its yield curve control policy at a meeting this week.
The 10-year JGB yield rose 1 basis point (bp) to 0.475 percent.
“Movement of yields shows caution for the BOJ’s tweak in the yield curve control (YCC) policy,” said Keisuke Tsuruta, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
“It is obvious that costs for keeping the YCC policy outweighs the effect for achieving the 2 percent inflation target.”
At the meeting, which starts on Thursday, the BOJ is expected to keep its monetary settings and dovish policy guidance unchanged to support a fragile economic recovery and budding signs of wage growth.
But the markets remember a shock in December, when the BOJ widened the movement range around 10-year JGBs.
The 20-year JGB yield fell 2 bps to 1.110 percent. The 30-year JGB yield was flat at 1.355 percent, and the 40-year JGB yield fell 0.5 bp to 1.545 percent.
Yields on shorter-ended notes rose, with the two-year JGB yield edging up 0.5 bp to -0.040 percent and the five-year yield inching up 0.5 bp to 0.160 percent. – Reuters
