Japanese Bonds, Stocks Rally as Traders Trim Rate-Hike Bets
- Nikkei closes 0.2% away from 33-year high after BOJ stands pat
- Benchmark 10-year bond yield drops to lowest since late July
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Japan’s benchmark government bond yield fell to the lowest since late July and the Nikkei 225 stock gauge rose to within a whisker of a 33-year high as traders trimmed bets for an interest rate hike in the next few months.
The rally in sovereign debt sent the 10-year yield tumbling as much as 8.5 basis points to 0.55%, a level last seen on July 28 when the Bank of Japan tweaked its yield-curve control settings. The Nikkei rose as much as 1.8%, a day after the BOJ bank provided no forward guidance on whether it will scrap the world’s last negative interest rate regime next year. The yen made a small gain after weakening as much as 1.5% versus the dollar on Tuesday.