TOKYO: Japanese government bond futures extended gains to hit a one-year high on Thursday on safe-haven bids as doubts deepen about Europe's ability to prevent its sovereign debt crisis from spinning out of control.
In cash bonds, the 10-year JGB yield slipped to a one-year low of 0.940 percent. The five-year yield fell 0.5 basis point to 0.310 percent, marking a two-month low.
December 10-year JGB futures climbed 0.08 point to 143.09 after hitting 143.14, their highest since November 2010.
"JGBs and US Treasuries are drawing flight-to-quality demand from investors who want to park their money temporarily," said a trader at a Japanese bank.
Ministry of Finance data showed foreign investors remained net buyers of Japanese bonds and bills last week for the third consecutive week, attracting safe-haven bids.
Meanwhile, some participants said strains in overseas money markets may be spilling over to the yen market, with three-month euro-yen interest rate futures down 0.5 basis point at 99.665 and the spread between the 2-year swap rate and JGB yields reaching its widest since January.
Ten-year government bond yields in France, Europe's largest economy after Germany, rose to their highest since April. Italian bond yields topped 7 percent.
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