Last month, the central bank quadrupled the minimum fee charged to financial institutions for borrowing some 10-year bonds and reduced the maximum amount for borrowing, a move to deter market players from short-selling the notes. In Asia, the heavy selling of short-dated U.S. government bonds continued on Wednesday, driving two-year Treasury yields to new 16-year highs as Federal Reserve Chair Jerome Powell's comments had traders scrambling to price in more rate hikes. The benchmark 10-year U.S. Treasury yield rose to as high as 4.0110% on the day and was last at 3.9913%. Powell opened the door to a 50 bps hike when he said on Tuesday that recent stronger-than-expected economic data meant the speed and size of hikes may also need to increase. Meanwhile, the BOJ's two-day policy meeting starts Thursday, with market players expecting the central bank to keep its ultra-low rate policy unchanged. Yields on longer-ended JGBs rose, with the 20-year JGB yield rising 1 basis point(bp)to 1.250%.
The 30-year JGB yield rose 3 bps to 1.450% and the 40-year JGB yield climbed 4.5 bps to 1.665%, its highest since Feb. 22. Benchmark 10-year JGB futures fell 0.08 yen to 146.79, with a trading volume of 8,851 lots. (Reporting by Junko Fujita; Editing by Savio D'Souza)
