Japanese 10-year government bond yields hit the key psychological level of 1% for the first time since the Bank of Japan stepped up unprecedented stimulus in 2013.
The focus now turns to how quickly the ultra-easy monetary policy will be reversed and how much further interest rates can rise. Those for 20- and 30-year bonds have recently hit a decade high, with inflation remaining above the central bank’s 2% target for two years, and analysts expect them to rise further.
“If interest rate expectations start to rise, Japanese government bond yields will continue to rise across the curve, especially over the 10-year horizon,” said Shoki Omori, chief strategist at Mizuho Securities. rise to 1.2% in the coming weeks, he said.
