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JGB yields edge to multi-year highs ahead of BOJ meeting
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JGB yields edge to multi-year highs ahead of BOJ meeting
Apr 22, 2024 11:40 PM

TOKYO, April 23 (Reuters) - Japanese government bond

yields ticked higher on Tuesday, with the two-, five- and

30-year yields reaching levels not seen in more than a decade,

as traders looked ahead to the Bank of Japan's policy-setting

meeting at the end of this week.

The two-year JGB yield rose 0.5 basis points

to 0.285% as of 0515 GMT, the highest since October 2009,

despite solid demand at an auction of the securities earlier in

the day. Bond yields rise when prices fall.

The five-year yield was 0.5 bps higher at

0.495%, and earlier touched 0.5% for the first time since April

2011.

The 30-year yield climbed 3 bps to 1.955%, a

level last seen in February 2013. The 20-year yield

added 2 bps to 1.665%, after touching the highest

since early November at 1.67%.

The 10-year JGB yield rose 0.5 bps to 0.885%,

hovering at a five-month peak.

Japan's central bank is not expected to alter policy or the

pace of bond purchases after its two-day powwow on Friday,

having just raised interest rates for the first time since 2007

just last month.

However, the BOJ is likely to signal a readiness to tighten

policy again this year, even as it takes a cautious,

data-dependent approach.

With the yen hovering at its weakest in 34 years near 155 to

the dollar, there has been some speculation the BOJ will act

earlier to support the currency.

However, Mizuho Securities strategist Shoki Omori doubts any

action is imminent. "Unless bond purchases are reduced by a

really significant amount, it likely won't affect the exchange

rate," he said.

With the Federal Reserve's own rate-setting meeting next

week, along with U.S. monthly jobs data, the BOJ will not want

to make changes for at least several more weeks, he said.

Considering the likely very measured pace of Japanese policy

normalization and persistently high U.S. rates, "the yen feels

cornered," Omori said. "It seems only a matter of time before

the 155 level is broken."

(Reporting by Kevin Buckland; Editing by Janane Venkatraman

)

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