JGB yields pull away from lows as investors' risk appetite rises

TOKYO: Japanese government bonds slipped on Monday, pulling yields away from recent lows, as investors' risk aversion waned after the weekend passed without any missile launches by North Korea and sapped some of the safe-haven appeal of fixed-income assets.

The 10-year cash JGB yield added 1 basis point to zero percent, moving away from Friday's 10-month low of minus 0.015 percent.

The September 10-year JGB futures contract was down 0.13 point at 151.38, while the December contract was 0.11 point lower at 151.23.

North Korea refrained from any missile activity and instead observed the 69th anniversary of its founding on Saturday with a celebration honouring the scientists behind the massive nuclear test it conducted last week.

Japanese stocks firmed with the Nikkei stock index up 1.3 percent in afternoon trading.

Weaker U.S. Treasuries also undermined JGBs, as the benchmark U.S. 10-year note yield rose to 2.088 percent from its close of 2.061 percent on Friday.

Data released early on Monday showed that Japan's core machinery orders rose in July at the fastest pace since January 2016, rebounding from a third straight month of falls and an encouraging sign of the increased capital investment needed for sustained economic recovery.