Key Takeaways:
- JGB futures fell 0.16 yen to 128.69 yen in Tokyo morning trading
- JPMorgan strategists said Ueda's hawkish speech raised June rate hike odds
- The 10-year JGB yield edged 1 basis point lower to 2.650%
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JGB futures fall 0.16 yen as BOJ rate hike bets intensify
JGB futures fell 0.16 yen to 128.69 yen in Tokyo morning trading, tracking Friday's U.S. Treasury declines and rising bets on a Bank of Japan rate increase in June.
"Markets interpreted Governor Ueda's latest speech as hawkish," two members of JPMorgan Global Markets Strategy said in a research report. "The shift from his more cautious tone on May 27 toward stronger vigilance on inflation was taken as a mild surprise, suggesting the BOJ is increasingly inclined to proceed with a rate hike."
The yield on the No. 381 10-year JGB edged lower by 1 basis point to 2.650%, according to data from the Japan Securities Dealers Association. The move extended Friday's price declines in U.S. Treasurys, with JGBs and Treasurys tending to move in tandem. The dollar held near the 160 yen level, a threshold that has historically prompted intervention from Japanese authorities.
A June rate increase would mark the BOJ's third hike since ending negative rates in March 2025, further narrowing the interest rate differential with the U.S. and potentially strengthening the yen. The BOJ's next policy decision is scheduled for June 19.
This article is for informational purposes only and does not constitute investment advice.
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