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Japanese bond yields rise on yen weakness, fiscal worries
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Japanese bond yields rise on yen weakness, fiscal worries
Jun 30, 2026 6:48 PM

TOKYO, July 1 (Reuters) - Japanese government bond (JGB)

yields rose on Wednesday, with longer-dated yields hovering near

one-month highs, as a weaker yen and fiscal expansion risks

weighed on sentiment.

Here are a few details:

* The benchmark 10-year JGB yield rose 3.5

basis points (bps) to 2.715%, the highest since June 9. Yields

move inversely to bond prices.

* The 20-year JGB yield was up 1.5 bps at

3.670% after touching 3.675%, its highest since late May. The

30-year yield climbed 0.5 bp to 3.950%.

* The yield on the 40-year JGB, Japan's

longest tenor, fell 1 bp to 3.795%.

* The yen slid to its weakest level against the dollar since

1986 overnight, touching 162.59 and fuelling speculation that

Tokyo could be nearing direct intervention.

* Prime Minister Sanae Takaichi's first economic blueprint

released on Tuesday called on the Bank of Japan to align

monetary policy with government efforts to boost growth,

signalling the administration's preference for low interest

rates.

* Policies under the Takaichi administration are not

expected to push long-term interest rates higher over the medium

to long term, Noriatsu Tanji, chief bond strategist at Mizuho

Securities, said in a note.

* However, he said uncertainty over whether a supplementary

budget will be enacted is likely to linger until autumn, leaving

a relatively high near-term risk that yields will move higher.

* U.S. Treasury yields ticked up overnight, following a

better-than-expected job openings report. It is the first in a

string of reports on the labour market this week, culminating

with Thursday's government payrolls report.

* "Higher U.S. yields yesterday are also likely to weigh on

JGBs, suggesting investors should be mindful of the possibility

that long-end yields will keep rising in the near term," Tanji

said.

* Big Japanese manufacturers' sentiment improved in the

three months to June to levels unseen since 2018, the Bank of

Japan's Tankan survey showed, a sign that the economy was

weathering the energy shock from the Middle East conflict for

now.

(Reporting by Satoshi Sugiyama; Editing by Subhranshu Sahu)

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