Japan’s 10-Year Yield Briefly Touches 1.98%, Highest Since 2007

Traders sold the new benchmark JGB on expectations the Bank of Japan will raise rates at its imminent policy meeting.

Overview

The yield on the newly issued 10-year JGB (380th issue, 1.7% coupon) rose intraday to 1.980% on Dec. 17.
The level was the highest for Japan’s benchmark long-term rate since June 2007, about 18 and a half years.
Bond selling reflected views that the BOJ may deliver an additional rate hike at this week’s Monetary Policy Meeting.
The move was described as a temporary intraday spike, with markets focused on the policy decision and any guidance.
Regional outlets reported the repricing across the JGB market as investors adjusted long-term rate expectations.