Japanese long-term bond yields increase while traders expect the central bank’s policy change

Regarding the continuing growth of inflation, some investors expect that the monetary policy of the Bank of Japan (BOJ) may change soon. For this reason, long-term government bond yields have increased for two trading sessions in a row.

On Monday, November 28, the 20-year Japanese government bond yield increased by 0.5 basis points to 1.095%. The 30-year Japanese government bond yield also increased by half a basis point and reached 1.485%. These data are accurate as of 05:30 GMT.

On Friday, November 25, long-term bond yield increased by 3 basis points. This growth was driven by the fact that Tokyo's core consumer price index (CPI) gained 3.6% compared to the previous year. It strongly affected the Bank of Japan, which continues to use a monetary stimulus in contrast to other central banks.

Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management, stated that in the current situation, foreign investors might bet that the Bank of Japan will consider the change of the current monetary policy course a necessity in the upcoming months.