JGB yields rise ahead of Bank of Japan policy decision

The Bank of Japan announces its decision on Friday, Oct 30, at the end of a two-day meeting.

The BOJ's October meeting runs Thursday, Oct 29, and Friday, Oct 30. The decision and Outlook Report are due on Oct 30.

The rise fits a pattern that has held since September. Officials have kept repeating data-dependent language, meaning policy that depends on incoming economic figures. Over the same period, yields have moved toward multi-decade highs. Expectations point to December as the likely timing of the next rate hike. The BOJ's next meeting after October is scheduled for Dec 17 and 18.

Nine respondents expected the 10-year yield to reach 3 to 3.1 per cent by year-end. Seven expected the 30-year yield to reach 4 to 4.1 per cent. CNBC reported that respondents expect the BOJ to hold rates this week while staying hawkish, meaning inclined to raise them. Thirteen respondents put the peak policy rate at 1.75 to 2 per cent by around mid-2027.

Japanese long-term yields reach US rate markets mainly through the carry trade, in which investors borrow in yen at low rates to buy higher-yielding assets abroad. The rise ahead of the decision continues the trend since September rather than breaking from it.