TOKYO -- The coupon on new 10-year Japanese government bonds hit the Bank of Japan's recently raised yield cap at an auction Thursday, less than a month after the move, signaling the potential for even higher borrowing costs as investors continue to test the central bank.
The Finance Ministry accepted 2.19 trillion yen ($16.4 billion) in bids out of a total of 10.45 trillion yen, setting a coupon rate of 0.5%, the highest in seven and a half years. The jump from the 0.25% coupon at the previous auction reflects the sharp rise in long-term bond yields since the BOJ on Dec. 20 widened the target band under its yield curve control policy.
