ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

Highest bond coupon in 7 years puts pressure on BOJ yield cap

10-year JGBs hit 0.5% mark, signaling heavier Japanese fiscal burden

Some traders see pressure on the yen eventually forcing the Bank of Japan's hand if it keeps interest rates low.   © Reuters

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.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more