Top Japanese regional bank pauses JGB purchases, anticipating rate increase.
Investors are awaiting Joyo Bank's return to domestic bond buying amid rising yields and potential interest rate hikes in Japan.
A trading room an hour from Tokyo is buzzing with excitement as Japanese government bond investors wait to see if domestic banks will jump back into the bond market. Joyo Bank, one of the biggest regional lenders, is playing it safe for now, according to Yoshitsugu Toba, a managing executive officer at the bank. He thinks the Bank of Japan might raise interest rates just one more time in July, but warns of a potential hike to around 1.5% in three years that could send debt yields soaring.
The spotlight's on whether Japan's regional banks will dive back into the benchmark 10-year notes, which saw yields hit their highest since 2009 during Friday's trading in Tokyo. Keep an eye on this, because it could shift the whole market!
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