TOKYO?The yield on the 10-year Japanese government bond rose to zero on Tuesday for the first time since Sept. 21, with Japan joining the global trend toward higher yields in the wake of Donald Trump's victory in the U.S. presidential election.
Yields on the 10-year bond, a widely used benchmark, have been negative for most of this year along with Japanese government bonds of shorter duration. That followed the Bank of Japan's decision, implemented in February, to introduce negative rates on certain deposits held by commercial banks.
On Sept. 21, the BOJ introduced a yield target of zero for the 10-year bond, the first time it had set such a target on longer-term bonds. Thecentral bank said it would modulate its bond purchases to keep the yield near the target.
Even after that policy shift, the yield stayed slightly below zero, but close enough to the target that BOJ officials said they weren't worried.
The election of Mr. Trump has lifted expectations for growth and inflation around the world, leading to a bond selloff. Bond yields rise when prices fall. The benchmark 10-year U.S. Treasury note touched 2.30% on Monday, up from a close of 1.867% on Election Day.
While Japan has seen less movement, the 10-year yield has moved steadily upward and hit zero during Tuesday trading in Tokyo. It stood at minus 0.07% just before the election.
Weak results in an auction of five-year bonds during the lunch break led yields to rise. The auction result "was a negative surprise," one Japanese brokerage-house analyst said.
Write to Hiroyuki Kachi at firstname.lastname@example.org
(END) Dow Jones Newswires
November 15, 2016 01:45 ET (06:45 GMT)
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