Japanese government bonds slump as inflation signals lift rate-hike bets

Tokyo, Sept. 11 (Reuters) - Japanese government bond (JGB) yields rose across the curve on Friday as global debt markets sold off and expectations for central bank rate hikes firmed.

Here are a few details:

• The benchmark 10-year JGB yield JP10YTN=JBTC climbed 6 basis points (bps) to 2.970%. Yields move inversely to bond prices.
• Global bond markets set the tone, with U.S. Treasury yields rising sharply overnight, driven by stronger-than-expected producer price data and surging oil prices that reinforced expectations of a Federal Reserve rate hike next week.
• "High crude oil prices and a weakening U.S. Treasury market are likely to serve as selling catalysts, and upward pressure on interest rates is expected to intensify in the domestic bond market," Takayuki Miyajima, senior economist at Sony Financial Group, said in a note.
• "Ahead of Bank of Japan and Fed meetings next week, the market is in a phase of carefully gauging the direction of monetary policy."
• Japan's wholesale inflation remained elevated in August, data showed on Friday, highlighting mounting price pressures that cement the case for a BOJ rate hike.
• The yield on the 40-year JGB JP40YTN=JBTC, Japan's longest tenor, increased 3.5 bps to 4.110%, while the 20-year yield JP20YTN=JBTC advanced 5.5 bps to 3.805%, and the 30-year yield JP30YTN=JBTC added 4.5 bps to 4.050%.
• At the shorter end of the curve, the two-year yield JP2YTN=JBTC, the one most sensitive to BOJ policy rates, gained 1 bp to 1.830%, while the five-year yield JP5YTN=JBTC rose 3 bps to 2.250%.