TOKYO: Japanese government bond (JGB) prices rose on Friday as investors sought safe-haven assets amid slumps in equities, while slower inflation growth in Japan’s capital eased bets on the Bank of Japan’s aggressive rate hike bets.
The 10-year JGB yield fell 2 basis points to 1.370%.
The two-year JGB yield fell 2 bps to 0.805% and the five-year yield fell 3 bps to 1.005%. Yields fall when bond prices rise.
“The global market turned into risk-off mode, which prompted investors to buy JGBs,” said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.
US Treasury 10-year yield fell to a more than two-month low of 4.22% in Asia trade.
Japan’s Nikkei share average fell to a five-month low on Friday as chip-related shares tumbled.
“Also, worries that the BOJ would raise interest rates faster receded after the market witnessed a slower-than-expected growth of prices in Tokyo.”
Core consumer prices in Japan’s capital rose 2.2% in February from a year earlier, slower than a median market forecast of 2.3% and a 2.5% gain in January.
Steady growth in prices and wages in Japan drove speculation that the BOJ may raise interest rates higher than the market had expected, pushing JGB yields to their more-than-a-decade-highs last week.
JGB yields rise on renewed bets for BOJ’s rate hike
BOJ’s deputy governor Shinichi Uchida on Friday reiterated the central bank’s readiness to continue raising short-term interest rates if economic and price developments move in line with its projections.
The 20-year JGB yield fell 1 bp to 2.03%.
The 30-year JGB yield rose 0.5 bp 2.35% and the 40-year JGB yield rose 3 bp 2.69%.
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