JGB yields rise on weak auction, renewed rate hike worries
TOKYO, Aug 15 (Reuters) -Japanese government bond yields rose on Thursday amid a weak outcome for the Bank of Japan's regular bond buying and as data indicating a strong economic rebound revived rate hike worries.
The 10-year JGB yield JP10YTN=JBTC rose 2.5 basis points (bps) to 0.830%.
The BOJ conducted its regular purchases of bonds with maturities from one year to 25 years and longer. There were more selling of bonds with maturities between 5 to 10 years, strategists said.
Japan's economy expanded by a much faster-than-expected annualised 3.1% in the second quarter, rebounding from a slump at the start of the year thanks to a strong rise in consumption.
"The strong consumption convinced the market to think the BOJ's rate hike scenario might be still valid," said Takahiro Ootsuka, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
The expectations for the BOJ's policy tightening had receded after the market rout last week when the benchmark Nikkei 225 .N225 marked its biggest single-day decline in nearly 40 years.
The two-year JGB yield JP2YTN=JBTC rose 3 bps to 0.32%.
The two-year OIS JPY2YOIS= was 0.39%, while the rate on the forward two-year OIS from August 2025 JPYOIS12X24=R was 0.4529%.
The forward two-year OIS rose to as high as 0.6597% on Aug. 1, the day after the BOJ unexpectedly raised its policy rate to 0.25%.
The 20-year JGB yield JP20YTN=JBTC rose 1.5 bps to 1.65%.
The 30-year JGB yield JP30YTN=JBTC was flat at 2.02%.
The 40-year JGB yield JP40YTN=JBTC was flat at 2.255%.
Reporting by Junko Fujita; Editing by Eileen Soreng
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