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Financials

JGB yields rise after hawkish comments from Fed officials

TOKYO, Aug 3 (Reuters) - Japanese government bond (JGB) yields rose on Wednesday, tracking U.S. Treasury peers that were lifted by hawkish comments from Federal Reserve officials.

The 10-year JGB yield rose 1.5 basis points to 0.185% and the 20-year JGB yield rose 2 basis points to 0.840%.

On Tuesday, two of the Fed’s more “dovish” policymakers — San Francisco Fed President Mary Daly and Chicago Fed President Charles Evans — signalled they and their colleagues remain resolute and “completely united” on getting U.S. interest rates up to a level that will more significantly curb economic activity, in a bid to tame inflation.

The 30-year JGB yield rose 2 basis points to 1.205% and the 40-year JGB yield rose 2.5 basis points to 1.350%.

Katsutoshi Inadome, senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, said it does not necessarily mean the remarks from the Fed officials set a trend for rising yields.

“Expectations for rate hikes initially become an upward pressure on yields on longer-ended notes, but they could eventually turn to downward pressure, because investors become cautions about slowing economy,” said Inadome.

Yields on shorter-ended notes also rose, with the two-year JGB yield climbing 0.5 basis point to -0.085% and the five-year yield rising 1 basis point to minus 0.020%.

Benchmark 10-year JGB futures fell 0.20 point to 150.47, with a trading volume of 11,586 lots. (Reporting by Tokyo markets team; editing by Uttaresh.V)

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