Key Facts
• August 28 bond market expected to rise, following U.S. long-term rate decline.
• U.S. 10-year bond yield closed at 4.23%, down 3 basis points on August 27.
• Japan’s 10-year bond yield forecast: 1.61%-1.63% (August 27: 1.625%).
• September bond futures closed at ¥137.46, up ¥0.11 from August 27.
• Mitsubishi UFJ Asset Management predicts limited upside for bond prices.
• Bank of Japan’s Junko Nakagawa to speak at Yamaguchi financial meeting on August 28.
• 2-year bond auction issuance: ¥2.6 trillion, with pre-issue yield at 0.875%.
• SMBC Nikko Securities expects steady demand due to current rate levels.
• Analyst Risa Mochizuki notes 70% chance of BOJ rate hike by year-end.
• Rising construction costs and tight supply drive Tokyo property prices up 28.4% YoY.
Summary
The bond market is set to rise on August 28, driven by declining U.S. long-term interest rates and expectations of long-term buying at month-end. Mitsubishi UFJ Asset Management forecasts limited price increases, with Japan’s 10-year bond yield projected at 1.61%-1.63%. U.S. 10-year bond yields fell to 4.23% on August 27, while September bond futures rose to ¥137.46. The Bank of Japan’s Junko Nakagawa will address financial conditions, potentially influencing market sentiment. A ¥2.6 trillion 2-year bond auction is expected to see steady demand, supported by current rate levels. SMBC Nikko Securities highlights a 70% likelihood of a BOJ rate hike by year-end. Meanwhile, Tokyo property prices surged 28.4% year-on-year in July due to rising construction costs and limited supply.
