JGB yields track US peers higher after Fed's oversized rate cut

By Brigid Riley

TOKYO, Sept 19 (Reuters) - Japanese government bond (JGB) yields rose on Thursday, tracking their U.S. peers higher, after the Federal Reserve delivered a larger-than-usual reduction in interest rates at the conclusion of its two-day meeting.

The 10-year JGB yield was up 2.5 basis points (bps) at 0.845%, as of 0105 GMT, after briefly touching 0.855% following an overnight rise in U.S. Treasury yields.

The U.S. Treasury yield curve on Wednesday touched its steepest level since July 2022 after the Fed cut interest rates by 50 bps as the central bank grappled with a weakening labour market.

Speaking at a press conference, Fed Chair Jerome Powell said the oversized cut was meant to show policymakers' commitment to sustaining a low unemployment rate now that inflation has eased.

Elsewhere on the JGB curve, the 20-year JGB yield rose 3 bps to 1.665%, while the 30-year JGB yield climbed 4 bps to 2.025%.

The five-year yield ticked 1.5 bps higher to 0.49%.

The two-year JGB yield had yet to trade.

Benchmark 10-year JGB futures fell 0.2 points to 144.68 yen.

(Reporting by Brigid Riley)