TOKYO- Japan’s benchmark 10-year government bond yield rose on Tuesday, reversing course as investors awaited the Bank of Japan’s policy decision.
The yield was up 0.5 basis point (bp) at 1.51 percent, after slipping 1 bp to 1.495 percent earlier in the session.
The BOJ is set to keep interest rates steady on Wednesday and discuss just how much of a risk the escalating US trade war poses to Japan’s export-reliant economy, which will be key to the timing of its next rate hike.
“The market is moving without a direction as investors are awaiting cues from tomorrow’s decision and comments of the central bank,” said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management.
“Investors will seek hints for the BOJ’s rate hike policy from its view on the US economic outlook,” Inadome said.
The two-year JGB yield also reversed course from an 0.5 bp decline, rising 1 bp to 0.815 percent. The five-year yield rose 0.5 bp to 1.1 percent, after declining marginally to 1.09 percent.
The yields hit levels last seen more than a decade ago earlier this month as bets escalated that the BOJ would raise its policy rate faster and higher on the back of growing wages and rising prices.
