By Rocky Swift
Benchmark Japanese government bond (JGB) yields jumped to a near 30-year high on Friday on lingering fiscal concerns.
Here are a few details:
• The benchmark 10-year JGB yield (JP10YTN=JBTC) climbed 2 basis points (bps) to 2.8%, and touched 2.81%, a level not seen since October 1996. The yield has now risen for five consecutive sessions, the longest such streak since May. Yields move inversely to bond prices.
• A weak 10-year JGB auction earlier this week, which saw a wider tail and softer demand, reinforced concerns about increased fiscal spending and heavier government borrowing, adding to the upward move in yields.
• Japanese bond markets have been under pressure since the government outlined large spending plans in its latest policy blueprint this week and called on the Bank of Japan to align monetary policy with growth efforts.
• Japan said combined public and private investment would exceed 370 trillion yen ($2.29 trillion) through fiscal 2040 as it works with the private sector to support strategic industries.
• Investors worry that could mean more borrowing, while the Bank of Japan may be slow to raise rates as inflation pressure builds.
($1 = 161.4000 yen)