JGB 10-year yield rebounds near 6-month high as investors speculate BoJ’s policy change in July meeting

The 10-year Japanese government bond yield touched a 6-month high during Asian session Thursday as investors continue to speculate that the Bank of Japan (BoJ) will adopt a change in its monetary policy stance at its July meeting, scheduled for early next week.

Debt prices had gained a day back when the central bank engaged in an unlimited amount of government bond-buying, pulling yields lower; however, it refrained from any daily market bond-buying operation today.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 2-1/2 basis points to 0.09 percent, the yield on the long-term 30-year note surged nearly 3-1/2 basis points to 0.81 percent and the yield on short-term 2-year too traded 1 basis point higher at -0.11 percent by 05:20GMT.

On Monday, the 10-year yield jumped 5 basis points, its biggest one-day surge since August 2016, after media reports claimed that the Bank of Japan was holding preliminary discussions on possible changes to its monetary policy in its upcoming meeting. However, the BoJ’s offer to buy an unlimited amount of 5- to 10-year JGBs in a special operation helped halt the yield surge on Wednesday.

According to the recent media reports, possible policy changes on the agenda include adjustments to interest-rate targets to make the central bank’s massive stimulus programme more sustainable.

Meanwhile, the Nikkei 225 index traded 0.18 percent lower at 22,573.00 by 05:30 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 17.99 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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