Japan’s 20-year bond yield hits multi-year high as BOJ buys shorter term notes

TOKYO — Japan’s 20-year government bond yield hit a near eight-year high on Thursday, as the Bank of Japan (BOJ) conducted emergency bond buying operations for shorter term notes. The yield of 20-year notes jumped 5 basis points to 1.320%, its highest level since October 2014. Financial Post Top Stories Sign up to receive the…
Japan’s 20-year bond yield hits multi-year high as BOJ buys shorter term notes

TOKYO — Japan’s 20-year government bond yield hit a near eight-year high on Thursday, as the Bank of Japan (BOJ) conducted emergency bond buying operations for shorter term notes.

The yield of 20-year notes jumped 5 basis points to 1.320%, its highest level since October 2014.

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Yields across the curve have been rising since the BOJ surprised the market last week by raising the cap on 10-year bond yield to 0.5%, from 0.25%.

“The allowance of the wider band for 10-year notes only fueled speculations for the Bank of Japan’s further actions, which are driving sell-offs,” said Kazuhiko Sano, a strategist at Tokai Tokyo Securities.

The rise in the 20-year bond yield only adds upward pressure to the 10-year bond yield, Sano said.

The BOJ conducted unscheduled bond buying in early trade on Thursday, targeting securities with one- to 10-year maturities. It conducted a similar operation again for the bonds with five- to 10-year maturities.

The bank also offered to buy unlimited amounts of bonds with two- and five-year maturities for a second straight session.

Those operations were in addition to the central bank’s daily offers to buy unlimited amounts of bonds with 10-year maturities.

The 10-year JGB yield rose 0.5 basis point to 0.455%.

The 30-year JGB yield climbed 4.5 basis points to 1.615%. The 40-year JGB yield jumped 6.5 basis points to 1.860%. The two-year JGB yield rose 0.5 basis point to 0.045%.

The five-year yield was flat at 0.240%. (Reporting by Junko Fujita Editing by Vinay Dwivedi)

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