Japan MOF to raise 10-year JGB coupon to 0.4-0.5% in Jan

JAPAN’S Ministry of Finance has finalised its plan to raise the 10-year Japanese government bond (JGB) coupon rate to 0.4-0.5 per cent from the Jan 5 auction, doubling the current 0.2 per cent, Kyodo news agency said on Monday (Dec 26).

A 10-year coupon of more than 0.4 per cent would be the highest since November 2015. The ministry made the internal decision after the Bank of Japan (BOJ)‘s tweak to its yield-curve control policy, Kyodo said.

The BOJ last Tuesday widened its cap on the 10-year bond yield to 50 basis points either side of its 0 per cent target from the previous 25 basis point band.

The 10-year yield rose to 0.445 per cent on Monday near the new 0.50 per cent upper limit, after BOJ governor Haruhiko Kuroda reiterated his earlier remark that the tweak last week was not a first step towards an exit from ultra-loose monetary policy. REUTERS