JGBs extend selloff as hawkish BOJ board member calls for faster-paced rate hikes

TOKYO: Japanese government bonds extended a selloff on Wednesday as the central bank’s hawkish board member called for faster-paced interest rate hikes. The 5-year bond yield jumped 4 basis points to a record high of 2.295%, and the 2-year JGB yield also rose 4 bps to 1.84%, its highest since April 1995. The Bank of Japan must conduct interest rate hikes nimbly after gauging domestic financial conditions and examining overseas developments, board member Hajime Takata said on Wednesday. “His messages indicated that the BOJ will raise its policy rates this month for certain, and it will keep raising rates at an unconventional pace,” said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management. Takata was the sole dissenter to the BOJ’s decision in July to keep short-term interest rates steady at 1%, calling for a rate hike to 1.25% to respond to inflationary risks from external demand shocks. JGB yields are on the rise along with their global peers, reflecting investor angst over inflation and government debt levels that stand to inflict fresh pain on consumers and businesses. Japan’s 10-year yield rose to 3.01% on Wednesday, after hitting 3% for the first t