Japanese Bond Yield Hits 7½-Year High

Yield on benchmark 10-year Japanese government bonds (JGB) rose to the highest level in more than 7-1/2 years as markets increased their bets that the Bank of Japan (BOJ) will pivot further from its ultra-loose monetary policy, Kana Inagaki and Hudson Lockett reported for the Financial Times.

Photo Insert: The 10-year JGB yield briefly rose above 0.53 percent after the market opened on Friday, breaking past the new ceiling set by the BoJ and reaching the highest level since June 2015.

The 10-year JGB yield briefly rose above 0.53 percent after the market opened on Friday, breaking past the new ceiling set by the BoJ and reaching the highest level since June 2015.

The yen also hit ¥128.66 against the US dollar, its highest level in more than seven months.

The jolt to the markets came as Citigroup forecast the Japanese central bank would abolish its longstanding yield curve control measures during its monetary policy meeting next week.

"Given the continued dysfunction of the JGB market … which the BoJ cited as a reason for its December policy decision, it seems logical that further policy adjustment may have become inevitable,” said Citigroup economist Kiichi Murashima.

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