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TOKYO – Japanese government bond (JGB) yields ticked down on Monday, as investors looked ahead this week for clues on the timing of further rate hikes in Japan.

The 10-year JGB yield fell 1.5 basis points (bps) to 0.725%, tracking a drop in U.S. Treasury yields overnight.

The two-year JGB yield, which briefly touched its highest since April 2011 at 0.205% on Friday, slipped 0.5 bps to 0.195%.

The market has already priced in policy hints that Japan’s central bank has given so far, following the bank’s decision last week to end its radical stimulus programme, leaving investors to seek new indications as to when it could hike interest rates again.

Minutes from the bank’s January meeting released in the Asian morning made little impact.

Instead, attention is now on a speech by BOJ board member Naoki Tamura on Wednesday, followed by a summary of opinions from the BOJ’s March meeting scheduled for publication on Thursday.

“Tamura’s comments will probably be hawkish, and after that we get the summary of opinions, so… I think yields will rise” around that point in the week, said Hiroshi Namioka, chief strategist at T&D Asset Management.

The nation’s February services producer price index report and Tokyo inflation data for March are also due this week.

Japan’s Nikkei newspaper reported last week that the BOJ is likely to hike the interest rate in either July or October, though an October hike is considered more likely.

Elsewhere, the five-year yield was down 1.5 bps at 0.375%.

The 20-year JGB yield and 30-year JGB yield had yet to trade.

Benchmark 10-year JGB futures rose 0.2 yen to 145.61 yen.

  • Published On Mar 25, 2024 at 11:36 AM IST

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