Japan's 10-year bond yield hits 29-year high after hawkish BOJ meeting summary

By Junko Fujita

TOKYO, May 12 (Reuters) - Japan's 10-year government bond yield rose to a 29-year high on Tuesday ahead of an auction of the same-maturity debt, as market participants took the summary of opinions of the Bank of Japan's April policy meeting as hawkish.

The 10-year JGB yield rose 2 basis points (bps) to 2.540%, its highest since June 1997.

Some BOJ policymakers in April saw the need to raise rates soon, with one signalling the chance of accelerating the pace of hikes if inflationary risks heightened, a summary of opinions at last month's meeting showed on Tuesday.

Last month, three BOJ board members dissented, calling for a rate hike to 1.0%. Naoki Tamura and Junko Nakagawa joined Hajime Takata, who unsuccessfully made a solo proposal to hike in March.

"The market took the overall tone of the summary hawkish, and it braced for an early interest rate hike," said Yuki Kimura, a bond strategist at Okasan Securities.

Japan's Ministry of Finance will hold an auction of the 10-year bonds later in the day. The outcome will be moderately weak over uncertainties about the impact of the Middle East war, Kimura said, adding that the high yield level could attract some investors.

The 30-year yield inched up 2 bps to 3.78%. The 40-year yield rose 1 bp to 4.035%.

Bonds of other tenors had not been traded, as of 0048 GMT. (Reporting by Junko Fujita; Editing by Subhranshu Sahu)