Japan bond yields rise after plunge on AI uncertainty
By Rocky Swift
TOKYO, Nov 9 (Reuters) - Japanese government bond yields rose on Monday, trimming their plunge from last week when a massive selloff in AI-related shares spurred demand for haven assets.
Here are a few details:
The benchmark 10-year JGB yield climbed 6.5 basis points to 2.7%. Yields move inversely to bond prices
US Treasuries fell in the latest session, pushing yields higher, after a payrolls report boosted expectations the Federal Reserve will raise rates at its December meeting
JGB yields sank to multi-month lows on Friday as investors sought traditional safe-haven assets during a deepening rout in technology shares. Japan's benchmark Nikkei gauge rallied on Monday following a 6% plunge on Friday
"Uncertainty over AI-related investment remains strong and the impact of risk reduction still needs watching," Keisuke Tsuruta, a senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, wrote in a note. "But because yields fell so quickly late last week, we are also mindful of room for a correction in the near term as a backlash.”
The Bank of Japan has held its policy rate at 1.25% since a September hike but has taken a more hawkish tone, and rate expectations have firmed toward a December hike to 1.5%
BOJ Governor Kazuo Ueda said on Friday the central bank expects underlying inflation to stay around its 2% target but recognizes there are "some upside risks"
The 5-year yield advanced 5.5 bps to 2.1%. The 2-year yield , the one most sensitive to BOJ policy rates, held steady at 1.725%