Japan will auction 10-year government bonds on Tuesday, testing demand as
markets price in potential BOJ rate hikes and yields approach the 3% milestone.
On Monday the 10-year yield touched a 30-year high of 2.95%. The BOJ is due to
announce policy on Sept. 18 and Deputy Governor Hino said a rate rise this month
remains possible. A senior fixed-income strategist at a Paris-based asset
manager, Kimura Ryutaro, said weak demand is likely if investors adopt a
cautious wait-and-see stance before the Sept. meeting, but some buyers may be
drawn to a 3% yield, which could cap gains above that level.
