Japan bond yields rise on faster BOJ hike bets

TOKYO, Sept. 2 (Reuters) - Japanese government bond (JGB) yields rose Wednesday on growing bets of faster interest rate hikes by the Bank of Japan, while the market eyes the remarks from the central bank's hawkish board member Hajime Takata later in the day.

Here are a few details:

• The benchmark 10-year JGB yield JP10YTN=JBTC rose 1 basis point (bps) to 3% in early trade. It rose to as high as 3.005%, the highest level since September 1996, in the previous session. Yields move inversely to bond prices.
• The five-year yield JP5YTN=JBTC rose 2 bps to a record high of 2.275%.
• "The 10-year bond yield is expected to rise further as market expectations for the BOJ's interest rate hike at a faster pace will grow," said Takashi Fujiwara, chief fund manager at Resona Asset Management's fixed income investment division.
• If the U.S. Federal Reserve raises its policy rate at its meeting in September, a 25 basis point increase of Japan's policy rate would not be enough to shore up the yen, said Fujiwara.
• The markets expect Japan's central bank to raise its policy rate to 1.25% at its meeting this month.
• BOJ's hawkish board member Hajime Takata will deliver a speech later in the day. Takata dissented on the BOJ's decision in July to keep rates steady, instead calling for a hike to 1.25%.
• "The market braces for a chance of Takata calling for a 50 bps rate hike," said Fujiwara.
• Japan may boost sales of two- and five-year bonds to respond to growing spending, with the nation's ministries and agencies requesting roughly 143 trillion yen ($893 billion) for the fiscal 2027 budget.
• The increase in sales of those bonds is seen as adding upward pressure on 10-year bond yields, said Fujiwara.
• U.S. Treasury yields advanced overnight following another round of strikes in the Iran war, joining other global bond markets in a broad-based selloff on worries about rising inflation.