TOKYO: Japanese government bond yields rose on Friday, tracking US Treasury yields higher, while investors became cautious after sell-offs as they wanted to confirm the pace of US rate hikes. The 10-year JGB yield rose 0.5 basis point to 0.090% and the 20-year JGB yield rose one basis point to 0.485%.
US Treasury yields rose overnight as a tighter labour market pointed to a recovering economy that renewed questions about the pace of inflation and when the Federal Reserve will raise interest rates.
The 10-year JGB yields could touch 0.1% in the near future depending on the US Treasury yields, a market participant said. The nation's economy is seen on course for a recovery as the Bank of Japan is discussing phasing out a COVID-19 loan programme if infections in the country continue to dwindle, potentially setting the bank up to exit a key crisis-mode policy sooner than investors expect.
The 30-year JGB yield also rose one basis point to 0.700%, while the 40-year JGB yield remained at 0.755% after being untraded. The two-year JGB yield was flat at minus 0.115% and the five-year yield rose 0.5 basis point to minus 0.070%. Benchmark 10-year JGB futures fell 0.10 point to 151.27, with a trading volume of 15,640 lots.
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