TOKYO: The benchmark Japanese government bond yield fell to a record low on Tuesday as rising global risk aversion hit Tokyo shares and prompted investors to seek safe-haven debt.
The 10-year JGB yield fell 2.5 basis points to 0.295 percent, a new record low.
March 10-year JGB futures climbed 0.14 point to 148.03. JGBs benefited as Tokyo's Nikkei tumbled 2.4 percent with sliding oil prices and investor concerns over the political situation in Greece slashed appetite for risk assets.
A drop in yields of other key government bonds like US Treasuries and German bunds also helped push JGB yields lower.
The German 10-year yield declined to a new record low overnight.
The flight-to-quality is another boon for the JGB market, which made broad gains last year as the Bank of Japan bought large amounts of debt as part of its extensive quantitative easing policy.
The JGB yield curve flattened as higher yielding longer dated maturities attracted demand amid depressed mood in markets.
"Real money accounts like life insurers and pension funds appear to be buying relatively higher yielding super long bonds as yields of shorter dated maturities continue to drop," said a trader at a Japanese bank.
The 20-year yield dropped 3.5 basis points to 1.01 percent. As a result, the 10-year/20-year yield spread tightened to 71.5 basis points, its narrowest since April 2013.
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