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JGB yields track US peers higher as Fed rate cut hopes fade
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JGB yields track US peers higher as Fed rate cut hopes fade
Apr 17, 2024 12:43 AM

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)

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