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JGB Yields Rise on Report BOJ May Widen Policy Target

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TOKYO, Jan 18 Reuters Japanese government bond yields rose after a local media report that the central bank might widen the band of its policy target of 10year yield and allow further rises when it reviews its policy framework in March.

Jiji press reported on Friday the Bank of Japan could enlarge the current 10year yield target of 0.2, or 20 basis point above or below zero percent, to allow more policy flexibility.

The 10year JGB yield rose 1.5 basis points to 0.045, touching a twomonth high of 0.050 at one point while the 20year JGB yield rose 2.5 basis points to 0.440.

The 30year JGB yield rose to as high as 0.675, its highest level since January 2019 before stepping back to 0.660, still up 1.5 basis points on the day.

But some analysts were sceptical as such an action could be taken as a policy tightening.

It is a sensitive issue and I doubt the BOJ can take such a drastic step, said Tetsufumi Yamakawa, chief economist at Barclays Securities in Tokyo. I dont think JGB yields will rise just because the BOJ widens the policy target band.

Reporting by Tokyo market team; Editing by Rashmi Aich

Source Reuters

 

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