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Japan's short-end JGB yields rise ahead of BOJ policy decision

BY Reuters | ECONOMIC | 07:27 PM EST

TOKYO, Jan 24 (Reuters) - Yields on shorter ended Japanese government bonds (JGBs) rose on Friday as the market awaited the Bank of Japan's policy decision later in the day.

The BOJ is expected to raise interest rates by 25 basis points to 0.5% on Friday to levels unseen since the 2008 global financial crisis.

The two-year JGB yield rose 0.5 basis point to 0.7%. The five-year yield rose 0.5 bp to 0.88%.

The market has almost fully priced the BOJ's rate hike, with swap rates indicating a 99.85% chance for the BOJ raising interest rates to 0.5% at Friday's meeting.

(Reporting by Junko Fujita and Brigid Riley; Editing by Himani Sarkar)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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