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JGB yields rise ahead of two-year auction as yen weakness weighs
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JGB yields rise ahead of two-year auction as yen weakness weighs
Jun 29, 2026 6:33 PM

TOKYO, June 30 (Reuters) - Japanese government bond (JGB)

yields rose on Tuesday ahead of a sale of two-year notes, as

inflation concerns and a soft yen weighed on sentiment.

Here are a few details:

-- The benchmark 10-year JGB yield rose 2

basis points (bps) to 2.650%. The 20-year yield

climbed 3 bps to 3.580%. Yields move inversely to

bond prices.

-- U.S. Treasury yields edged higher overnight as crude

prices advanced amid Middle East tensions and ahead of key U.S.

jobs data. The yen fell to 162-per-dollar level on Tuesday, the

weakest point since 1986.

-- "Selling is expected to dominate Japanese bond market on

Tuesday," Hiroshi Watanabe, a senior economist at Sony Financial

Group, said in a note. "With the dollar-yen exchange rate

approaching 162, a level not seen in about 40 years, concerns

are likely to grow over the risk of inflation exceeding

expectations due to the Bank of Japan's delay in raising

interest rates further."

-- The Ministry of Finance will sell about 2.8 trillion yen

($17.26 billion) in two-year notes later in the session.

-- Inflation concerns persisted in Japan, driven by higher

energy costs and upstream price pressures, while expectations

for further BOJ tightening remained elevated following its June

rate hike.

-- Prime Minister Sanae Takaichi's administration appointed

Ayano Sato, seen as an advocate of loose monetary policy, as a

central bank board member on Tuesday.

-- The two-year yield, the one most sensitive

to Bank of Japan policy rates, held steady at 1.395%, while the

five-year yield rose 1 bp to 1.880%.

($1 = 162.2300 yen)

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