TOKYO, Feb 27 (Reuters) - Japanese government bond (JGB) yields rose on Thursday as bets on the Bank of Japan's early interest rate hike revived, after heavy bond buying was triggered this week, following the comments by the central bank's governor Kazuo Ueda.
The 10-year JGB yield JP10YTN=JBTC rose 3 basis points to 1.395%. The two-year JGB yield JP2YTN=JBTC rose 2 bps to 0.815% and the five-year yield JP5YTN=JBTC rose 3 bps to 1.045%.
"The yields started falling after comments from BOJ Governor Ueda on Friday last week. His comments became a trigger for closing short positions," said Shinji Ebihara, chief fixed income strategist at Tokio Marine Asset Management.
"But because the market believes that the BOJ will keep raising rates, there were little cues for investors to continue buying JGBs."
Ueda said on Friday the central bank stood ready to increase government bond buying if long-term interest rates rise sharply, halting the yields' sharp rises. The two-year JGB yield, the most sensitive to the BOJ's policy, fell to as low as 0.78% this week, its lowest level since Feb. 14.
A weak outcome of the two-year JGBs earlier in the day also hurt sentiment.
"Investors are cautious about active bets because there will be auctions for 10-year and 30-year JGBs next week," Ebihara said.
Japan's bond yields rose also after the country's top currency diplomat, Atsushi Mimura, said on Wednesday he did not see any disparity between recent rises in the yen and a slew of positive economic data.
The comments underscored Tokyo's view that the currency's rebound was broadly in line with an improving economy that could justify hikes in Japan's interest rates.
The 20-year JGB yield JP20YTN=JBTC rose 2.5 bps to 2.05% and the 30-year JGB yield JP30YTN=JBTC rose 1.5 bps to 2.335%.
The 40-year JGB yield JP40YTN=JBTC rose 3 bps to 2.65%.
Related Articles
Sea 2Q25 Earnings Preview: Shopee is Still Rocking?
TradingKey - Sea Limited will release its earnings for the second quarter of the fiscal 2025 on August 12th before the bell.
BoE August Rate Decision Commentary: Where Next for the Pound?
TradingKey - On 7 August 2025, the Bank of England (BoE) lowered its benchmark interest rate from 4.25% to 4%, aligning with broad market expectations. Notably, the decision sparked significant division within the committee, requiring two rounds of voting to pass.
MP Materials 2Q25 Earnings Comment: Going up the Value Chain
TradingKey - MP Materials released its earnings for the second quarter of the fiscal 2025 on August 7th after the bell.The smaller loss and the better revenue were surely welcomed by investors, and the stock is up 8.50% in the post-bell session.
Eli Lilly’s Q2 2025 Triumph: Soaring Revenue, Plunging Stock – What’s Behind the Paradox?
TradingKey - Eli Lilly released its Q2 2025 financial results, demonstrating impressive financial performance. However, despite the stellar results, its stock price plummeted by over 14%, closing at approximately $640, down more than 30% from its yearly high..jpg)
Caution on Short-Term Downside Risks for U.S. Stock Market
TradingKey - Last Friday, the U.S. Labor Department sharply revised downward its May and June nonfarm payroll figures by a combined 258,000 jobs, a reduction exceeding 90%. Meanwhile, July’s payroll increase came in at just 73,000, falling short of the 100,000 forecast.
