JGB yields mixed ahead of market events this week

Reuters
2-min read

(Updates yield levels, changes headline and first paragraph)

TOKYO, March 4 (Reuters) -

Japanese government bond (JGB) yields were mixed on Monday as investors awaited a series of market-moving cues this week, including a 10- and 30-year JGB auctions.

The 10-year JGB yield inched down 0.5 basis point (bp) to 0.71%. The five-year yield was down 0.5 bp at 0.365%.

"The yields hardly moved today as the market braced for various events," said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management.

The events also include Bank of Japan (BOJ) Governor Kazuo Ueda's remarks on Tuesday and Federal Reserve Chair Jerome Powell's testimony before lawmakers on Wednesday and Thursday.

Yields on super-long maturities rose as investors shifted their attention to the 30-year bond auction after a somewhat weak outcome of the BOJ's bond buying operations, said Yuki Matsuda, market analyst at Mizuho Securities.

The 30-year JGB yield rose 2.5 bps to 1.765%, its highest since Feb. 20.

The two-year JGB yield hit a near 13-year high last week after BOJ board member Hajime Takata's hawkish comments fuelled speculation the BOJ would end the negative rate policy as early as March.

Takata said the BOJ must consider overhauling its ultra-loose monetary policy as Japan is finally seeing prospects for achieving the central bank's 2% inflation target.

Soon after, Governor Ueda reiterated his stance, saying it was too early to conclude that inflation was close to sustainably meeting the 2% target.

"The BOJ policymakers made comments in two different directions. That is aimed at making it difficult for the market to guess exactly in which month the BOJ would tweak its negative rate policy," Inadome said.

"That way the BOJ can minimize the surprise when it does not tweak the policy in March."

The markets expect the BOJ to end negative rates as early as March. The BOJ will hold a policy meeting on March 18-19.

(Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips and Sohini Goswami)