JGB yields climb to more than two-month peaks as US peers bounce
By Brigid Riley
TOKYO, Oct 15 (Reuters) -Japanese government bond (JGB) yields rose on Tuesday to their highest levels in more than two months, tracking a rise in U.S. Treasury yields during Asian trading hours.
The benchmark 10-year Treasury yield climbed as high as 4.104% on Tuesday. The U.S. Treasury market was closed on Monday for Columbus Day. US/
The 10-year JGB yield JP10YTN=JBTC ticked up 2.5 basis points (bps) to 0.97%, its highest since Aug. 2.
The two-year JGB yield JP2YTN=JBTC rose 1 bp to 0.42% and the five-year yield JP5YTN=JBTC was up 1.5 bps at 0.59%, with both hitting their highest levels since early August.
Meanwhile, investors were considering the possible impact a softer yen could have on the Bank of Japan's (BOJ) near-term policy as the currency weakened back towards the 150 per-dollar level.
The yen JPY=EBS last fetched 149.365 per dollar, having touched a 2-1/2-month low of 149.98 on Monday when Japan was closed for a holiday.FRX/
Market expectations for a rate hike have grown slightly in recent weeks, as worries about the U.S. economic outlook faded and the yen weakened. 0#BOJWATCH
But the yen would have to depreciate to 160 per dollar or beyond to have a visible sway on the BOJ policy via inflation, Mizuho Securities analysts said in a note.
"We find it difficult to envision the yen weakening that far," they said.
Economists polled by Reuters earlier this month were nearly split on the probability of another rate hike this year, with a very slim majority calling for rates to remain unchanged until next year.
The 20-year JGB yield JP20YTN=JBTC was up 1.5 bps at 1.75% after earlier touching its highest since Aug. 8.
The 30-year JGB yield JP30YTN=JBTC was flat at 2.165%.
Benchmark 10-year JGB futures 2JGBv1 fell 0.22 point to 143.77 yen.
Reporting by Brigid Riley; Editing by Subhranshu Sahu
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