TOKYO (Sept 24): Japanese government bond yields jumped on Thursday on renewed concerns about inflation ​even after the Bank of Japan raised its policy rate to a 31-year high ‌last week.

The 10-year JGB yield rose 10 basis points (bps) to 3.075%, its highest since August 1996. The five-year yield rose 10 bps to a record high of 2.375%.

The selloff in bonds reflected a global market rout, domestic ​inflation worries and signals from BOJ Governor Kazuo Ueda that further rate hikes lie ​ahead, leaving markets concerned the central bank may still be behind the curve.

Yields ⁠move inversely to bond prices.

"Interest rates are being reviewed globally, and Japan's interest rates are particularly ​low," said Masayuki Koguchi, executive chief fund manager at Mitsubishi UFJ Asset Management.

"So when the market ​finds a negative market cue, the selloff accelerates," he added.

Japan's yields rose across the curve on Thursday, the first trading day after the BOJ raised its policy rate to 1.25% from 1% on Friday. Japan's markets were closed ​through Wednesday due to public holidays.

Ueda signalled further rate hikes after the policy meeting, but the ​yen weakened, prompting Japanese authorities to conduct rate checks in the currency market several hours after the BOJ's decision.

On Wednesday, ‌US Treasury ⁠yields jumped in their sharpest daily increase since the Liberation Day market rout last year, after a strongr-than-expected purchasing managers' report ignitede fresh inflation fears and an auction of five-year notes was poorly received.

The dollar rallied to its highest in nearly two months on Wednesday, on growing expectations of ​a near-term Federal Reserve ​rate hike. A weaker ⁠yen increases import costs, pushing domestic prices higher.

Local media reports about Economic Minister Minoru Kiuchi seeking advice from reflationist economists in crafting the economic ​blueprint boosted worries that the central bank would be behind the curve ​in coping ⁠with rising prices, said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management.

Prime Minister Sanae Takaichi's first economic blueprint, compiled in July and focused on economic growth, jolted markets and sent bond yields soaring.

The ⁠selloff ​of super long bonds eased earlier this month as bets ​on BOJ rate hikes at a faster pace grew.

On Thursday, the 20-year JGB yield jumped 8 bps to 3.900%. The ​30-year yield rose 6 bps to 4.130%.

Uploaded by Siow Chen Ming