A global tech-led equity selloff pushed investors into safe havens on Friday,
lifting Japanese government bonds and sending yields to multi-month lows. The
10-year JGB yield fell 14.5bps to 2.61%, its lowest since June 26; the 2-year,
most sensitive to policy bets, dropped 13.5bps to 1.72% (lowest since Aug. 28);
the 5-year fell 16.5bps to 2.025% (lowest since Aug. 6). The rout has prompted a
reassessment of the Bank of Japan's chance of hiking next month; traders put the
probability of a December hold at 58% and a hike at 42%. Mizuho Securities
senior market economist Yusuke Matsuo said if market turmoil persists, the BOJ
may find further rate rises more difficult, strengthening incentives to pause.
