JGB yields track US peers lower, BOJ official hints at continued stimulus
By Kevin Buckland
TOKYO, Oct 12 (Reuters) - Japanese government bond yields fell on Thursday, tracking a decline in U.S. Treasury yields as dovish remarks from Federal Reserve officials fuelled bets that rates have peaked.
Meanwhile, Bank of Japan board member Asahi Noguchi reiterated the consensus view at the central bank for "patient monetary easing" until wage growth momentum is in place and for inflation to ease over the coming months.
The 10-year JGB yield fell 2 basis points (bps) to 0.750%. Benchmark 10-year JGB futures rose 0.27 yen to 145.51.
Ten-year Treasury yields stood around 4.71% after dropping back this week from a 16-year peak of 5.053% hit on Friday.
The 20-year JGB yield fell 4.5 bps to 1.505%, while the 30-year yield fell 4 bps to 1.660%.
The two-year JGB yield fell 1 bp to 0.045%. The five-year yield fell 1.5 bps to 0.315%.
Despite the decline in yields this week, there is some speculation in the market of another increase in the 10-year note yield ceiling - currently at 1% - at the BOJ's two-day meeting ending Oct. 31, a day before the Fed's own policy announcement.
However, Mizuho Securities strategist Yasunari Ueno considers this unlikely.
"The strategy may be to acknowledge the rapid change in the rates environment and argue that it is raising the fixed rate on a pre-emptive basis," he wrote in a note.
"The risk is that, by retreating without firing a single shot, the markets will become increasingly distrustful of Bank talk about curbing excessive long-term rate surges."
Ueno expects a tweak to the 10-year yield ceiling at the same time the BOJ removes negative short-term interest rates, likely in April.
(Reporting by Kevin Buckland; Editing by Dhanya Ann Thoppil)
