JGB yields touch multiweek lows as traders weigh geopolitics, BOJ policy outlook
TLT•Japanese government bond yields fell to multiweek lows, with the 10-year yield down 1 basis point to 2.88%, as traders weighed geopolitical and inflation risks ahead of next week’s Bank of Japan meeting.
1. Yields hit recent lows
The benchmark 10-year JGB yield fell 1 basis point to 2.88%, its lowest since September 9. The 5-year yield dipped 1.5 basis points to 2.285%, its lowest since September 18, while the 30-year yield dropped 2.5 basis points to 3.895%, its lowest since August 6.
2. Markets assess risks
JGBs have benefited from safe-haven flows in recent days as markets watched developments in the Middle East, France’s deficit and protests, and equity swings linked to earnings and AI news. Mizuho Securities analyst Yuki Matsuda said big movements in rate-hike expectations were hard to imagine ahead of next week’s BOJ meeting, while concerns about escalating Middle East conflict remained strong.
3. BOJ outlook
The BOJ is widely expected to hold rates steady next Friday, while markets assign 60% odds to a quarter-point hike by the conclusion of the following meeting in December.
