TOKYO: Japanese government bonds edged up on Wednesday, taking their cue from a rise in U.S. Treasuries after Federal Reserve chair Janet Yellen sounded a cautious tone on U.S. interest rate increases.
Yellen's speech stressed the need for caution and highlighted external risks.
The yield on benchmark 10-year Treasury notes stood at 1.807 percent, in Asia, after skidding to a four-week low of 1.805 percent in U.S. trade on Tuesday following Yellen's remarks.
JGB trading was cautious ahead of the end of Japan's fiscal year, which ends this month. Bank of Japan buying operations, weaker stocks, as well as downbeat economic data also underpinned JGBs.
The central bank offered to buy 400 billion yen of JGBs in the 1- to 3-year zone, 420 billion yen in the 3- to 5-year zone, 240 billion yen in the 10- to 25-year zone, and 160 billion yen of JGBs maturing in over 25 years, under its massive asset purchase programme.
Data released early in the session heightened speculation that Japan will need to muster more stimulus to avert another recession. Factory output fell 6.2 percent in February from the previous month, the biggest tumble since 2011.
The Nikkei stock index skidded 1.3 percent.
The benchmark 10-year JGB yield edged down half a basis point to minus 0.095 percent, inching back toward a record low of minus 0.135 percent hit earlier this month.
In the superlong zone, the 20-year JGB yield slipped 1.5 basis points to 0.395 percent.
June 10-year JGB futures added 0.04 point to end at 151.83.
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