TOKYO: Most Japanese government bond (JGB) yields rose on Thursday, as demand for covering short positions paused, while futures fell with fears over a possible global banking crisis appearing to subside.
The 10-year JGB yield rose 1 basis point (bp) to 0.310% and the 20-year JGB yield climbed 0.5 bp to 0.970%.
“The yields rebounded after declines driven by demand for JGBs after the Bank of Japan kept its policy unchanged this month,” said Noriatsu Tanji, chief bond strategist at Mizuho Securities.
The 10-year yield, which hovered 0.5% at the top end of the BOJ’s policy band, fell to as low as 0.24% on March 14 after the BOJ maintained its ultra-loose policy this month.
Investors also scooped up safe-haven debt amid worries about a possible banking crisis after a failure of US Silicon Valley Bank and Swiss lender Credit Suisse’s liquidity issues.
The BOJ is scheduled to announce details on its bond buying plans for the next three months on Friday.
“The BOJ could lower the bottom end of the range for purchase amounts because yields could fall further with another financial turmoil,” said Tanji.
The five-year yield rose 1.5 pbs to 0.090%.
JGB yields fall after strong auction outcome, futures’ gain
Benchmark 10-year JGB futures fell 0.27 yen to 148.35, with a trading volume of 8,749 lots.
The 30-year JGB yield was flat at 1.195%.
The 40-year JGB yield fell 1 basis point to 1.405%.
The two-year JGB yield fell 1 basis point to -0.085%.
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