Japan government bond yields rose sharply on Wednesday after a U.S. Treasury
selloff sparked by hotter-than-expected U.S. inflation and renewed bets on more
aggressive Fed tightening. 5-year JGB yield climbed 9.5bps to 2.195%; 10-year
rose 10.5bps to 2.795%; 2-year, most sensitive to policy, added 8.5bps to 1.86%.
U.S. 2-year Treasury jumped 18bps to 4.74%, the biggest single-day rise since
April 2025. Earlier this week JGB yields had fallen as equity weakness lifted
safe-haven demand and traders trimmed odds of Bank of Japan tightening;
Barclays' Japan FX and rates head Shinichiro Kadota said the prior drop looked
like an overshoot and sees scope for yields to recover further.
