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JGB yields track US peers higher as tariff fears ease 
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JGB yields track US peers higher as tariff fears ease 
Mar 24, 2025 11:17 PM

TOKYO, March 25 (Reuters) - Japanese government bond

(JGB) yields rose on Tuesday, with shorter-end yields touching

their highest since October 2008, as the recent risk-off mood

eased on hopes of more measured U.S. tariffs.

Concerns about a slate of U.S. tariffs due to take effect on

April 2 lessened somewhat as investors took the latest comments

from U.S. President Donald Trump as a sign of flexibility,

sending Treasury yields drifting upwards on Monday.

JGB yields followed suit, with the 10-year JGB yield

rising 3 basis points (bps) to 1.57%, holding

just under recent highs. The benchmark 10-year JGB futures

fell 0.38 points to 137.46 yen.

The two-year yield and five-year yield

both climbed to their highest since October 2008,

sitting at 0.875% and 1.165%, respectively.

Elsewhere, minutes of the Bank of Japan's January policy

meeting showed policymakers discussed the pace of further

interest rate hikes after deciding to increase rates to their

highest in 17 years.

Last week, the central bank stood pat on rates and warned of

heightening global economic uncertainty amid changing U.S.

tariff policies. Market expectations for additional rate hikes

remained intact, however, with many betting on another hike

around July.

"Barring an escalation of tariff reprisals and a more

adverse economic impact on Japan than expected, the BOJ is

unlikely to halt progress toward a gradual increase in interest

rates," said Ryutaro Kimura, a fixed income strategist at AXA

Investment Managers.

Growing risks that inflation could remain higher than the

bank's 2% goal, after a somewhat stronger-than-forecast wage

negotiation outcome this month, were likely to keep upward

pressure on long-term interest rates, he said.

A continued reduction in the BOJ's purchases of government

bonds could also contribute, he added.

On the superlong end, the 20-year JGB yield

rose 2.5 bps to 2.3%, while the 30-year JGB yield

was up 1 bp at 2.605%.

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