The yield on Japan's benchmark 10-year government bond rose to 2.95 per cent on Monday, its highest level since September 1996. The yen weakened to 160.20 per dollar on Friday, despite record joint intervention. Markets read Fed Chair Kevin Warsh's 28 August Jackson Hole speech as leaving the door open to further rate increases, with markets now pricing a higher probability of a Fed hike before the BOJ's September meeting.
The yield on Japan's benchmark 10-year government bond rose to 2.95 per cent on Monday, setting a fresh 30-year high. Nikkei Asia reported the 2.95 per cent print as the session's market yield, while NAI 500 noted this was the highest level seen since September 1996. The 10-year point serves as the reference for Japan's government-bond curve.[1], [2]
Alongside the bond surge, the yen showed renewed signs of weakness, sliding to 160.20 per dollar on Friday, according to NAI 500. This currency softness followed a record 98.7 billion dollar joint intervention by Japan and the United States over the prior month to support the yen, which had limited success. Takahide Kiuchi of the Nomura Research Institute framed curbing the yen's weakness as helpful for correcting dollar strength and reducing the U.S. trade deficit.[1], [2]
Markets read Fed Chair Kevin Warsh's 28 August Jackson Hole speech as leaving the door open to further rate increases if underlying inflation does not move to the objective at sufficient speed, Nikkei Asia and NAI 500 reported. With the BOJ policy meeting set for 17-18 September, markets are pricing more than a 55 per cent probability of a Fed rate rise at the US FOMC meeting that precedes it, according to NAI 500.[1], [2]
