TOKYO, Nov 19 (Reuters) - Japanese government bond
yields inched down on Tuesday, as investors were relieved after
the Bank of Japan chief did not provide a decisive hint on the
timing of the next interest rate hike.
The 10-year JGB yield fell 0.5 basis point
(bp) to 1.065%. The 20-year JGB yield fell 0.5 bp
to 1.890%.
BOJ Governor Kazuo Ueda on Monday offered few clues on
whether the BOJ would raise rates in December. Ueda spoke at a
news conference on Monday, saying the economy was progressing
towards sustained wages-driven inflation and warned against
keeping borrowing costs too low.
"Ueda's comments were rather dovish," said Katsutoshi
Inadome, senior strategist at Sumitomo Mitsui Trust Asset
Management.
"Some in the market had expected that Ueda would announce
the rate hike in December on Monday."
Overnight Index Swap (OIS) on Tuesday indicated a 46.46%
chance of the BOJ raising rates to 0.5% in December, down from
more than a 50% chance last week.
A weaker yen drives expectations for the rate hike.
Investors expected the BOJ to provide clear hints before the
policy shift as the central bank was blamed for the market
turmoil in August after its surprise rate hike in July, Inadome
said.
The 30-year JGB yield fell 1.5 basis points
to 2.285%.
Yields on the shorter-end of the curve were flat, with the
two-year JGB yield unchanged at 0.55%. The
five-year yield was flat at 0.700%.