The rise in long-term yields in Japan's domestic bond market shows no sign of letting up, with the yield on newly issued 10-year Japanese government bonds temporarily rising to 3.015%. The market is increasingly pricing in a terminal BOJ policy rate of around 2.5%.
Long-term yields in Japan's domestic bond market have continued to rise without let-up. In addition to higher yields in the medium-term zone, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term rates, temporarily rose to 3.015%, setting a new 30-year high.
Market participants are increasingly pricing in a faster pace of rate hikes and a prolonged hiking cycle, and expectations that the Bank of Japan's terminal policy rate, or terminal rate, will approach 2.5% are gaining traction.
Government bond yields continued to rise on the 2nd, mainly in the medium- to long-term maturities, drawing attention to the future direction of interest rates.
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