Japan's 10-Year Bond Yield Surges to 3.115%, Highest in 30 Years

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The yield on Japan's 10-year government bond jumped to 3.115% today, its highest level since August 1996. Long-term government bond yields, which move inversely to bond prices, climbed on inflation concerns driven by surging crude oil prices, as well as the rise in U.S. Treasury yields last Thursday. Japan's 10-year government bond yield closed at 3.075% that day, while the 10-year U.S. Treasury yield jumped to 5.225%, its highest level since 2007, and the 30-year Treasury yield climbed to 5.502%. U.S. Treasuries came under heavy selling pressure amid expectations that the Federal Reserve will raise interest rates again, after having just raised them by 0.25% at its meeting on September 16. Most recently, the CME Group's FedWatch Tool indicates that investors are pricing in a 69% probability that the Fed will raise rates by 0.25% to 4.00-4.25% at its October meeting, up from 55.4% a week earlier, and a 50.3% probability that the Fed will raise rates by another 0.25% to 4.25-4.50% at its December meeting, up from 41.7% a week earlier.

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