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Big News: Jgb Prices Ended The Session Sharply Lower

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TOKYO (AFX) - Japanese government bond (JGB) prices ended the session sharply lower, with the yield on the lead 10-year debt at a 21-month high as fresh speculation emerged in the market that the Bank of Japan would act soon, possibly in July, to hike its near zero interest rates, dealers said.

They noted that a string of recent data pointing to an end to deflation and a continued economic recovery have heightened prospects for a such a hike despite BoJ governor Toshihiko Fukui disappointing the market on Tuesday when he failed to give any hint over the likely timing of a possible increase.

The yield on the benchmark 10-year bond closed at 1.925 pct, up from 1.880 pct late yesterday. This was the highest finish since June 17, 2004 when it ended at 1.940 pct.

The yield on the lead 20-year note was at 2.320 pct, a 20-month closing high. Yesterday, it finished at 2.260 pct.

The yield on the bellwether five-year debt rose at 1.385 pct, up from 1.355 pct at the close yesterday.

Bond prices move inversely to yields.

The price of the 10-year bond futures contract was at 132.33 yen, down from 132.58 yen previously.

"Many players are now speculating again that the Bank of Japan will end its zero interest rate policy as early as July," said Kazuya Ito, a fund manager at Daiwa SB Investments.

"In addition, key buyers, including major life insurance companies here, appear to be taking a wait-and-see stance (because of the rates uncertainty), even though they have buying needs," he added.

Informa Global Markets economist Kenji Arata said the yield on the lead 10-year note will probably reach the 2.000 pct mark in coming weeks.



This is the biggest pro-HPC financial news day in a long time. :)

We're very close now. Very close indeed.

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  • 309 Brexit, House prices and Summer 2020

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