Japan's reported 3.0%–3.5% JGB yield ceiling becomes the level to watch

Reuters reported July 16 that Japan's government likely sees 3.0%–3.5% as the defence line for 10-year JGB yields — beyond which authorities would face pressure to ramp up bond purchases. The BOJ's policy rate sits at 1.0%, with the next hike to 1.25% not expected before October. That gap leaves the long end as the curve's pressure point — and gives traders a level to test.