By Rocky Swift
TOKYO, Sept 25 (Reuters) - Japanese government bond (JGB) yields extended their climb to historic levels on Friday as a global fixed-income selloff and expectations of further rate hikes by the Bank of Japan reinforced upward pressure on borrowing costs.
Here are a few details:
The benchmark 10-year JGB yield JP10YTN=JBTC climbed 4 basis points (bps) to 3.115%, a level last seen in August 1996. The 5-year yield JP5YTN=JBTC advanced 3 bps to a record 2.405%. Yields move inversely to bond prices.
JGB yields tracked a sharp rise in U.S. Treasury yields, which surged overnight to multi-year highs as firmer oil prices revived inflation concerns and investors priced in greater odds of a near-term Federal Reserve rate hike.
"Increasing expectations of rate hikes against a backdrop of persistent yen weakness, a widening term premium driven by concerns over fiscal discipline, and rising overseas rates are likely to continue to drive up yields," Barclays Securities Japan analysts, led by Shinichiro Kadota, said in a note.
The BOJ raised its policy rate to a 31-year high of 1.25% last week. Former central bank board member Makoto Sakurai said the BOJ could hike roughly once every three months toward the 2% level by around June next year.
The 2-year yield JP2YTN=JBTC, the one most sensitive to BOJ policy rates, rose 2 bps to 1.92%, the highest since April 1995.
The yield on the 40-year JGB JP40YTN=JBTC, Japan's longest tenor, gained 5.5 bps to 4.255%.
(Reporting by Rocky Swift in Tokyo; Editing by Sherry Jacob-Phillips)