Japan's 2-year bond yield jumps on growing bets for early rate hike
TLT•Two-year yield hits 31-year high
TOKYO, Aug. 7 (Reuters) - Japan's two-year government bond yield rose to a 31-year high on Friday as bets for an early rate hike by the Bank of Japan grew after the yen weakened.
Here are a few details:
- The two-year yield JP2YTN=JBTC, most sensitive to BOJ's policy rates, rose 4.5 basis points to 1.605%, its highest since May 1995.
- The five-year yield JP5YTN=JBTC rose 5.5 bps to 2.08%. Yields move inversely to bond prices.
- "This is an ongoing bet since the government intervention in the currency market last week," said Shuichi Ohsaki, senior portfolio manager at Meiji Yasuda Asset Management.
- "The bets that the BOJ would raise rates as early as September revived today because the yen weakened," he said.
Longer-dated JGB yields also rise
The 10-year JGB yield JP10YTN=JBTC rose 3.5 bps to 2.795%.
The 20-year JGB yield JP20YTN=JBTC was up 2 bps to 3.66%. The 30-year yield JP30YTN=JBTC rose 1 bp to 3.91%.
Yen weakness and intervention support bets for higher rates
Japan and the United States launched a rare joint yen-buying intervention last week and vowed to take further action if needed to shore up the currency.
The U.S. dollar rose against the Japanese yen overnight, helped by safe-haven positioning from investors awaiting details on a proposed deal to end the Iran conflict and ahead of Friday's monthly U.S. jobs report.
