Pimco Expects Two More BOJ Hikes This Year, Lifting JGB Returns

Pacific Investment Management Co. expects the Bank of Japan to raise interest rates two more times this year, boosting future returns on the nation’s government bonds.

The BOJ will raise the policy rate to 0.25% in July or September, to 0.5% in December or next January, and to 1% during 2025, according to Tomoya Masanao, co-head of Japan and Asia-Pacific portfolio management at Pimco. He expects the yield on the five-year JGB to be around 0.9% at the end of 2024 and the yield on the 10-year JGB to be around 1.25%.