JGB Yields Rise Amid Inflation Worries and BOJ Rate Hike Bets

Japanese Government Bond (JGB) yields rose on Monday due to concerns about inflation, as oil prices increased and investors considered the likelihood of a Bank of Japan interest-rate hike in September.

The benchmark 10-year JGB yield grew by 1.5 basis points to 2.810 percent, while the two-year yield, most sensitive to BOJ's policy, reached its highest level since May 1995 at 1.615 percent.

Miki Den, senior Japan rate strategist at SMBC Nikko Securities, attributed inflation fears to higher oil prices, which rose due to uncertainty over the Strait of Hormuz's reopening and Iran's insistence that the US must meet certain conditions for a deal with Oman defining new shipping lanes.