TREASURIES-U.S. bonds slip as Japan loosens shackles on its yields
SINGAPORE, Dec 20 (Reuters) - Treasuries fell on Tuesday, especially at longer tenors, after the Bank of Japan unexpectedly lifted a cap on 10-year yields and unleashed a sell-off across global bond markets.
Benchmark 10-year Treasury yields rose more than 10 basis points to a three-week high of 3.711%. Thirty-year yields were last up 11 bps at 3.7297%.
Yields rise when bond prices fall. The Bank of Japan widened limits in which 10-year bond yields can move and they quickly surged near to the new ceiling of 0.5%. Martin Whetton, head of fixed income and currency strategy at Commonwealth Bank in Sydney said that triggered selling in bonds globally.
Bond yields in Korea and Australia, for example, also leapt.
Shorter-dated Treasury yields rose, but not as much. Two-year yields rose two basis points to 4.2806%. Five-year yields rose seven basis points to 3.7819%. (Reporting by Tom Westbrook; Editing by Dhanya Ann Thoppil)
