TOKYO Oct 11 Japanese government bond yields
rose on Tuesday, hit by comments from the Bank of Japan chief
and as global bond yields increased on higher oil prices and
expectations massive stimulus by major central banks may be
coming near its end.
The 10-year JGB yield rose 2.0 basis points to minus 0.050
percent, hitting its highest level in nearly
three weeks, following a market holiday on Monday.
BOJ Governor Haruhiko Kuroda said on Sunday he does not see
the need to ease policy further now and that the central bank's
bond buying could be reduced considerably under its new
framework adopted last month.
During the long weekend in Japan, German 10-year Bunds yield
rose to a four-week high of 0.065 percent while
U.S. 10-year Treasuries yield hit a four-month high of 1.771
A climb in global bond yields has come as oil prices are
rising solidly on expectations that oil-producing countries next
month could reach a deal to cut production, lifting inflation
Brent oil futures hit a one-year high of $53.73 per
barrel on Monday after Russia and Saudi Arabia both said a deal
between the Organization of the Petroleum Exporting Countries
(OPEC) and non-OPEC members such Russia on curbing crude output
Investors are also getting nervous that additional
quantitative easing is becoming increasingly difficult both in
Europe and Japan, as they are seen running out of bonds to buy
at some stage after massive purchases over years.
European bonds were hit by speculation that the European
Central Bank could consider reducing the scale of its asset
purchases before the programme finally ends.
The BOJ's new policy framework, many investors also think,
will likely end up leading it to buy a smaller amount of bonds.
The market is also cautious ahead of a 30-year JGB auction
The 30-year yield rose 2.0 basis points on Tuesday to 0.525
percent, its highest level since Sept 21.
"Investors are not eager to buy ahead of the 30-year JGB
auction tomorrow. For now, we expect their buying at the yield
around 0.55 percent," said Naoya Oshikubo, yen rates strategist
The BOJ refrained from conducting bond buying operations on
Tuesday, triggering minor disappointment among some traders.
The 10-year JGB futures price fell 0.19 point to 151.80
(Reporting by Hideyuki Sano; Editing by Richard Borsuk)