Japanese government bond yields rose Monday as persistent concerns about the Middle East conflict and higher energy prices provided the backdrop for a week-old central bank rate hike.
The 10-year Japanese government bond yield added 1.5 basis points to 2.660%, the Wall Street Journal reported. Yields move inversely to bond prices.
The move came after the Bank of Japan last week raised its policy rate to 1%, the highest level in 31 years. The central bank cited a risk that underlying inflation could exceed its 2% target, in part because of higher oil prices, according to the report from Kosaku Narioka of the Journal.
Investors are focusing on energy prices and developments in the Middle East after President Trump warned that the U.S. could strike Iran over its support for Hezbollah, the militant group that Israel is fighting in Lebanon.
The yield increase Friday continued a pattern of elevated volatility in Japanese sovereign debt, which has been sensitive to shifting expectations about the central bank’s rate path and the geopolitical factors that drive oil costs.