TOKYO, April 17 (Reuters) - Japanese government bond
yields rose on Wednesday, tracking U.S. Treasury yields higher,
as Federal Reserve officials suggested that U.S. interest rates
were likely to stay higher for longer.
The 10-year JGB yield rose 2 basis points
(bps) to 0.885%, its highest level since Nov. 13.
The five-year yield rose 0.5 basis point to
0.49%, a 13-year high scaled in the previous session.
"There was an expectation that a delay in Fed rate cuts
could make it easier for the Bank of Japan to raise rates," said
Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust
Asset Management.
Fed Chair Jerome Powell said on Tuesday that the central
bank may need to keep rates higher for longer than previously
thought, helping the U.S. 10-year Treasury yields climb to
five-month highs.
In Japan, the market expects the BOJ to raise rates again
sometime this year. The policy-sensitive two-year JGB yield
rose 0.5 bp to 0.28%, its highest since November
2009.
The yen's weakness has also raised expectations for a rate
hike in Japan as an increase in imported goods could raise
prices, said Inadome.
The yen has been stuck at levels last seen in 1990
on the back of the dollar's strength.
"The market will eye how the weak yen and rising commodity
prices would affect the BOJ's policy at its meeting later this
month," said Naoya Hasegawa, chief bond strategist at Okasan
Securities.
The BOJ is holding a two-day meeting starting on April 25.
The 20-year JGB yield rose 1.5 bps to 1.660%
and the 30-year JGB yield rose 1.5 bps to 1.940%.
(Reporting by Junko Fujita; Editing by Subhranshu Sahu)