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Short-term JGB yields set for weekly gain as bets solidify for BOJ rate hike
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Short-term JGB yields set for weekly gain as bets solidify for BOJ rate hike
Jun 4, 2026 7:41 PM

TOKYO, June 5 (Reuters) - Japanese government bonds

(JGBs) held steady on Friday, while short-term yields were

poised for a weekly advance as market bets solidified around

policy tightening by the central bank.

Here are a few details:

* The benchmark 10-year JGB yield fell 1

basis point (bp) to 2.660%. Yields move inversely to bond

prices.

* The two-year yield, the one most sensitive

to Bank of Japan policy rates, eased 1 bp to 1.405%, still

poised for a 4-bp rise for the week. The five-year yield

slid 1 bp to 1.920%.

* A speech by Bank of Japan Governor Kazuo Ueda on Wednesday

indicated he was ready to raise the bank's key interest rate,

with markets now reflecting an 80% probability of a hike at the

June 15-16 policy meeting.

* Recent remarks from BOJ officials highlighted the risk

that energy shocks caused by the Iran war could become

persistent through wages and expectations.

* "A rate hike at the June meeting is now largely priced

in," Sony Financial Group senior economist Takayuki Miyajima

said in a note. "Market attention has shifted to the pace of

future rate hikes, and uncertainty surrounding monetary policy

is perceived as a source of upward pressure on long-term

interest rates."

* Japan's real wages climbed 1.9% year-on-year in April,

data showed on Friday, marking a fourth consecutive monthly

gain.

* Over the past month, JGB yields have surged to

multi-decade highs on inflation worries and fiscal concerns.

* The yield on the 20-year JGB held steady at

3.575%. The yield on the 30-year JGB added 1 bp

to 3.890%, marking its third consecutive daily gain. The yield

on the 40-year JGB, Japan's longest tenor, was

unchanged at 3.750%.

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