JGB yields jump to multi-year highs on global reflation trade

TOKYO, Feb 25 (Reuters) – Yields on Japanese government bonds jumped to multi-year highs on Thursday, tracking a rise in U.S. and European bond yields as investors bet on ultra-easy monetary policy igniting inflation.

Growing speculation that the Bank of Japan will widen the trading band for the benchmark 10-year tenor in its monetary policy review next month also pushed up yields.

Benchmark 10-year JGB futures fell 0.19 point to 150.93, with a trading volume of 30,875 lots. Futures briefly fell to the lowest since March last year.

The 10-year JGB yield rose 2 basis points to 0.135%, their highest since November 2018.

The two-year JGB yield rose 0.5 basis point to minus 0.110%, the highest since August last year.

The spread between two-year and 10-year yields stood at 0.236 basis points, widest since Mach last year.

The 20-year JGB yield rose to 0.555%, while the 30-year JGB yield jumped to 0.745%, both the highest in more than two years.

At the long end of the yield curve, the 40-year JGB yield hit a two-year high of 0.795%.

At the middle of the curve, the five-year yield rose to minus 0.055%, the highest in almost a year.

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