JGBs edge lower as September Fed rate-hike odds climb to 59%

  • JGBs edged lower in early Tokyo trading, following Friday’s decline in U.S. Treasurys.
  • 59% was the implied probability of a 25-basis-point September Fed rate increase.
  • The 10-year JGB yield rose 0.5 basis points to 2.930%.

Japanese government bonds edged lower in early Tokyo trading, following Friday’s decline in U.S. Treasurys, which often move in tandem. Fed Chairman Warsh’s Friday speech prompted a reassessment of monetary-policy expectations, with the implied probability of a 25-basis-point rate increase at the Federal Reserve’s September meeting rising to around 59% from about 35% a day earlier, XS.com senior market analyst Antonio Di Giacomo said in an email. The 10-year JGB yield rose 0.5 basis points to 2.930%. Di Giacomo said the shift indicated investors were again seriously weighing further monetary tightening if inflation does not show more convincing signs of slowing.

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