Japan's 10-year bond yield hits nearly 16-year high after sell-off in German bonds
The 10-year JGB yield jumped 6.5 basis points (bps) to 1.505%, its highest level since June 2009. The yield posted its biggest daily rises since the market turmoil in August last year.
"The 10-year JGB yield rose to above 1.4% on expectations that the Bank of Japan would raise interest rates further. Today it got an additional boost from the sell-off of German bonds," said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.
A major overhaul to German government borrowing triggered the biggest sell-off in the country's debt since the late 1990s. The country's 10-year Bund futures fell 0.7% on Thursday, indicating a likely decline in cash bond prices later.
On Wednesday, the euro zone's benchmark 10-year yield climbed 30 basis points.
"The JGB yields may fall going forward because there will be some market-moving cues this week. If U.S. jobs data is weak, the yields may take a different course," Inadome said, adding that the market awaits the outcome of the European Central Bank meeting later in the day.
JGB yields in other maturities also hit their new multi-year highs.
The two-year JGB yield rose 2 bps to 0.85% and the five-year JGB yield rose 5.5 bps to 1.125%, their highest since October 2008.
The 20-year bond yield rose to as high as 2.195%, its highest since June 2009.
The 30-year bond yield jumped 9 bps to 2.495%, its highest since June 2008.
The 40-year bond yield rose 1 bp to 2.845%.
(Reporting by Junko Fujita; Editing by Rashmi Aich and Janane Venkatraman)
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