Japan's 10-year JGB yield rose 10 bps to 3.075% on Thursday as markets reopened
after the Silver Week holiday, the highest level since 1996. Yields across the
curve climbed; the 5-year jumped 9.5 bps to 2.37%. The move followed an
intensified US Treasury selloff—strong US economic data and a weak Treasury
auction pushed US yields to near two-decade highs—while rising oil prices
heightened inflation concerns and reinforced expectations of further Fed hikes.
Domestic pressure also weighed: the BOJ hiked last Friday and left scope for
additional tightening, but traders were disappointed by a lack of clearer
guidance on the pace of future moves. JGBs are therefore being driven by both
expected BOJ tightening and a global repricing of long-term borrowing costs.
