Interest rates on all 3 types of retail JGBs offered in October reached the 2% range. The offering period is from 8 to 30 October, with initial rates of 2.05% for the 10-year bond, 2.39% for the 5-year fixed-rate bond and 2.07% for the 3-year fixed-rate bond, all reportedly at record highs.
Terms for the retail JGBs to be offered in October were announced, with the offering period set for 8 to 30 October. In response, the initial pre-tax rate for the 10-year bond was set at 2.05%, while the 5-year fixed-rate bond was set at 2.39% and the 3-year fixed-rate bond at 2.07%, all at record-high levels.
On 1 September, the yield on the 10-year JGB, the benchmark for long-term interest rates, reached 3.000% and subsequently rose as high as 3.115%; the rate after the auction on the 6th also reached 3.1%. Against this backdrop, yields on retail JGBs have been trending higher.
The Bank of Japan's policy rate was raised to 1.25% at a Monetary Policy Meeting, and the possibility of further rate hikes has been noted. Long-term yields are under upward pressure amid expectations for higher prices, which is also expected to affect demand for retail JGBs.
The September consumer price index for Tokyo's 23 wards was up 2.7% year on year, confirming a rise of more than 2% for the first time in 8 months. Rising long-term yields in Europe and the United States have also been reported as one factor behind the rise in Japanese government bond yields.
Overall, yields on all 3 types of retail JGBs have risen into the 2% range, and they may once again attract attention as an investment option for funds prioritizing safety.