[Japanese Government Bonds Extend Losses as Central Bank Rate Hike Pushes Yields to Multi-Year Highs]
Japanese government bonds continued their decline on Monday as the Bank of Japan raised its benchmark interest rate to the highest level in 30 years. The yield on Japan's 10-year government bond rose 7.5 basis points to 2.095%, the highest level since February 1999, while the two-year government bond yield climbed 3 basis points to 1.12%, marking a new high since 1997. The sell-off in sovereign debt was triggered by the Bank of Japan's rate hike last Friday, with traders disappointed by the lack of clear guidance on when the central bank might tighten policy again. After Japanese Finance Minister Katsuyuki Katayama and top foreign exchange official Atsushi Mimura issued warnings about recent currency weakness, the yen briefly rose 0.3% against the dollar to 157.25.