Japanese government bond yields eased on Monday morning amid a flight to safety following losses in U.S. technology shares, while a debt-issuance pledge and Bank of Japan policy added to market focus.
Reuters reported the 10-year yield at 2.9%. The outlet also reported the two-year yield at 1.890%, down 1.5 basis points, and the 20-year yield at 3.790%, also down 1.5 basis points.
Friday’s U.S. session ended with the Nasdaq Composite at 26,140.03, down 2.1%; the S&P 500 closed at 7,659.44 after a 1.1% loss, and the Dow Jones Industrial Average finished 0.3% lower at 52,002.41, AP reported. AP connected the tech losses to concern that companies borrowing to expand AI operations might struggle to maintain their spending as global bond yields climbed.
Reuters reported that Prime Minister Sanae Takaichi told parliament Monday the government would manage the total amount of bond issuance. The outlet linked those remarks to market sentiment. In a separate Sept. 17 statement, Takaichi said annual issuance would be managed across the initial and supplementary budgets to leave room for fiscal needs, according to the Prime Minister’s Office.
The Bank of Japan (BOJ) voted 7-2 on Sept. 18 to raise its target for the uncollateralized overnight call rate to around 1.25% from around 1%. The new guideline took effect Sept. 24. The bank said further policy-rate adjustments would respond to economic activity, prices and financial conditions as underlying consumer price inflation approached 2%.
BOJ Gov. Kazuo Ueda told parliament Monday that underlying inflation was “quite close” to the 2% target, Reuters reported. The BOJ’s next monetary policy meeting is scheduled for Oct. 29-30.
