JGB yields jump as BOJ board member says no need for action on bond selloff

TOKYO, May 22 (Reuters) - Japanese government bond yields jumped on Thursday following remarks from a Bank of Japan board member who saw no need for the central bank to step into the market even as super-long bond yields are hovering around record levels.

"At times, central banks must take action to stabilise markets. I don't think we're seeing a situation where we need to do so," said Asahi Noguchi on Thursday when asked about the rise in super-long yields.

The comments came as market players urged the BOJ to increase buying of super-long bonds, or terminate tapering for that maturity, in the wake of sharp rises in their yields.

The yields on super-long JGBs, such as 20-, 30- and 40-year bonds, were on the rise amid caution around Japan's deteriorating fiscal condition, with some political parties calling for consumption tax cuts to fend off rising prices.

The 20-year JGB yield JP20YTN=JBTC jumped 5.5 basis points (bps) to 2.595%, its highest level since October 2000, as Noguchi spoke.

"Basic understanding is that upward pressure on bond yields should be controlled by the Ministry of Finance as it can do so by cutting issuance," said Takafumi Yamawaki, head of Japan rates research at J.P. Morgan Securities.

"But given that the BOJ had been controlling yields for a long time under its ultra-loose rate policy, the central bank should be careful about market volatility while it tapers bond buying. The remarks (from Noguchi) only increase volatility in the market."

The 30-year JGB yield rose 3.5 bps to 3.17%, after hitting a record high of 3.185% in the previous session.

Miki Den, a senior Japan rate strategist at SMBC Nikko Securities, said the upcoming Upper House election in July might be key to turning the course of the yields.

"If the Liberal Democratic Party wins the majority, there will be no consumption tax," he said.

The 10-year JGB yield rose 5.5 bps to 1.57%, its highest since March 28.