Amid a global sell-off in the bond market today, the yield on Japan’s 10-year government bonds has climbed to its highest level in 9 years, raising the possibility of further bond purchases by the Bank of Japan (BOJ) to temper the continued rise.
As investors gauge the central bank‘s tolerance for surging yields, the yield has risen by two basis points, reaching its highest level since 2014 at 0.665%.
The BOJ has intervened in the market twice since its policy adjustment on July 28th.
Ayako Sera, Market Strategist at Sumitomo Mitsui Trust Bank, stated, “The BOJ’s last intervention was to stop the rise in yields at a faster pace, so there seems to be some room before triggering intervention at this point.”
However, she added that if they refrain from intervening, investors might test what the BOJ’s next level is, potentially accelerating the pace of yield increase.
