JGB yields rise after weak auction as inflation worries simmer

Business Recorder, citing a Reuters report, said Japanese government bond yields rose on Friday, with the five-year yield hitting a record high of 2.195%. The advance came after a two-year auction drew noticeably weaker demand than the previous month's sale, which unsettled buyers. Yields move in the opposite direction to bond prices, so the rise means prices fell during the session.

Across the curve, the five-year yield gained 4 bps, while the two-year climbed 1.5 bps to 1.7%, having been flat before the auction results. Longer maturities also moved higher, with the 10-year up 3.5 bps to 2.925%, the 20-year up 4 bps to 3.805% and the 30-year up 5 bps to 4.11%.

Oil had risen overnight on continued Middle East uncertainty, and most JGB yields were already rising earlier. Separately, Tokyo consumer prices edged higher in August, a reading that supports expectations of a Bank of Japan rate increase next month. Attention also turns to the debut Jackson Hole address from Kevin Warsh, now heading the Federal Reserve, which is due later today.