TOKYO- Shorter-duration Japanese government bond (JGB) yields rose on Monday, with the 10-year yield hitting a 15-year high after data revealed that the economy expanded more than expected in the fourth quarter, boosting bets for an interest rate hike.
The 10-year JGB yield rose 2.5 basis points (bps) to 1.375 percent for the first time since April 2010, while 10-year JGB futures fell 0.35 points to 139.3 yen.
The five-year yield climbed 4.5 bps to a 17-year high of 1.05 percent.
Japan’s gross domestic product expanded at an annualized clip of 2.8 percent in the October-December quarter, data showed on Monday, beating market estimates of a 1.0 percent gain, on improved business spending and a surprise increase in consumption.
The data supports bets that the Bank of Japan (BOJ) will continue to raise interest rates as it sets about normalizing super-easy monetary policy.
Markets have factored in 37 bps of rate hikes for the rest of the year, with another 25-bp increase fully priced in by September.
