Japan Economic & Financial Weekly

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Recent rise in 2-year JGB yield points to possibility of 1.1% yield for 10-year bond

Preview of long- and super long-term JGB yields for March

The 10-year JGB yield trades with an upward bias this week. Hawkish remarks by Policy Board member Hajime Takata on February 29 fuel concerns about an unwinding of NIRP at the March 18-19 BoJ meeting. If Board member Junko Nakagawa makes similar comments at a meeting of business leaders in Shimane prefecture on March 7, and if the 10-year JGB offering on March 5 and the 30-year auction two days later end with weak results, the 10-year yield tests the upside. But any upside is limited if investors continue to take profits in the stock market and rebalance their portfolios into bonds. The 30-year JGB yield trades at a level that keeps the 10s30s JGB spread at around 102bp.