JGB yields see modest rise ahead of BOJ, Fed commentary

JGB yields rise: Japanese government bond (JGB) yields observed a modest increase on Thursday, with the market remaining quiet as market participants anticipated key remarks from the heads of the Bank of Japan (BOJ) and Federal Reserve on Friday. Mid- and long-date JGB yields rose slightly as market players adjusted position from what were lessening concerns about a US recession. Remaining movement was cautious ahead of BOJ Governor Kazuo Ueda's appearance before Japan's parliament, where he may discuss the central bank decision to raise rates last month. At 0415 GMT, the benchmark 10-year JGB yield was up 0.5 basis points to 0.87 per cent. 10-year JGB futures fell 0.14 yen to 144.84 yen. Analysts would like to see if Governor Ueda would change his hawkish stance given the recent market volatility. A market analyst from Mizuho Securities noted that there was a strong uncertainty around that, and it was hard to make a move. The recent hawkish BOJ development was also related to a huge drop of Japanese equities, the largest single-day decline since the 1987 Black Monday crash. The same analyst noted some institutional investors were now thinking about another rate hike this year, after the BOJ released research papers that anticipated that broadening inflationary pressures might also continue to require steady increases in rates. On the world stage, US Fed Chair Jerome Powell will be speaking at Jacks Hole Economic Symposium on Friday, and the market expects the possibility of rate cuts by the Fed in September. The market will be paying attention to Powell's comments on the size of a potential cut, and policy outlook. In other yield movements, the 2-year JGB yield (JP2YTN=JBTC) rose by 1.5 basis points to 0.36 per cent. The 5-year yield (JP5YTN=JBTC) rose by 1 basis point to 0.485 per cent with both the 20-year (JP20YTN=JBTC) and 30-year (JP30YTN=JBTC) JGB yields unchanged at 1.7 per cent and 2.08 per cent, respectively.(With Reuters inputs.)

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JGB yields see modest rise ahead of BOJ, Fed commentary

Mid- and long-date JGB yields rose slightly as market players adjusted position from what were lessening concerns about a US recession.

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