Japanese government bond yields swung after a broad selloff tied to Bank of Japan tightening bets, with the 10-year yield rising above 2.8% before easing to 2.795% as rebound buying returned.
Japan's government bond market saw sharp moves across maturities as investors increased bets on further Bank of Japan tightening after the BOJ kept its policy rate unchanged at 1% last week, following a 25-basis-point hike in June. The two-year JGB yield rose to 1.540%, its highest intraday level since May 1995, while the 10-year yield climbed above 2.8%, reaching 2.805% on the morning of the 3rd before slipping to 2.795% on the morning of the 4th as buying returned. Policymakers highlighted upside inflation risks, and Governor Kazuo Ueda said it was "more necessary than ever" to stay vigilant about higher inflation, while calmer U.S. rates and a pause in crude oil gains later helped pull yields lower.