BOJ keeps lid on 10-year yield while other tenors renew multi-year highs

[TOKYO] The Bank of Japan's bond-purchase salvo continued to keep a lid on 10-year Japanese government bond yields on Tuesday, even as those on other tenors rose to fresh multi-year highs.

The 10-year yield fell 0.5 basis point to 0.210 per cent.

It had reached a six-year high of 0.230 per cent on Thursday, just 2 basis points shy of the central bank's implicit tolerance ceiling, forcing policymakers to announce an unlimited purchase operation for Monday to rein in its rise.

The BOJ keeps the 10-year yield pegged around 0 per cent as part of its yield curve control policy.

Elsewhere, yields rose amid worries about heated global inflation and a resultant acceleration of monetary policy tightening, particularly in the United States.

Meanwhile, the buildup in tension surrounding Ukraine has added another level of uncertainty to markets.

"The situation in Ukraine, inflationary pressure in the US and the outlook for interest rates, these things are loadstones around the market's neck, keeping prices heavy," said Shinsuke Kajita, chief strategist at Resona Holdings Inc in Tokyo.

The two-year JGB yield rose 0.5 basis point to minus 0.030 per cent, having earlier touched minus 0.025 per cent for the first time since January 2016.

The five-year yield added 0.5 basis point to 0.040 per cent. Earlier in the session, it reached 0.045 per cent, the highest since December 2015. An auction of the securities on Tuesday went smoothly, market players said.

The 20-year yield advanced 1.5 basis points to 0.685 per cent. It earlier hit 0.690 per cent for the first time since October 2018.

The 30-year JGB yield rose 1.5 basis points to 0.900 per cent, also the highest since October 2018.

Benchmark 10-year JGB futures fell 0.01 point to 150.05, with a trading volume of 19,554 lots. REUTERS