Japan government bonds fell sharply on Friday, mirroring U.S. Treasuries, which
weakened for a second session as traders priced more aggressive Fed hikes. The
10-year JGB yield rose 8bps to 2.87%; the 30-year yield climbed 7bps to 3.99%.
Market pricing for Bank of Japan tightening firmed: OIS imply roughly an 87%
chance of a rate increase before December. Tokai Tokyo Securities chief
strategist Kazuhiko Sano said the JGB and U.S. Treasury selloff could be an
overreaction but there is no clear catalyst for a sustained JGB rally; any
rebound is likely to be limited.