Japan bond yields rise as GDP growth disappoints
Japan's 10-year government bond yield climbed to around 2.93%, a three-decade high, while Cabinet Office data showed second-quarter GDP expanded at an annualised 1.1%, well below forecasts and down from a revised 1.9% in Q1. Quarter-on-quarter growth was 0.3%, with flat private consumption and a 1.2% drop in capital expenditure, while net exports added 0.5 percentage points helped by a weak yen. The GDP deflator rose 2.6% year on year, and traders are increasingly betting the Bank of Japan may raise its policy rate in September, a development that could unsettle global carry trades and markets.
Ten-year JGB yield reached about 2.93%, the highest since 1996.
Context
Bond yields rose before the government released slower GDP data. The yen weakened, prompting large coordinated intervention. Markets will watch the Bank of Japan's September meeting for possible rate action.
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