TOKYO: Japanese government bond yields edged lower and futures rose for a seventh straight session on Monday, amid pressure from lower US yields and expectations that the Bank of Japan (BOJ) will keep its ultra-easy stimulus settings unchanged for longer.
Benchmark 10-year JGB futures rose 0.09 yen to 148.87, from 148.08 on June 15, when the current winning streak began.
The 10-year JGB yield was flat at 0.365%, matching the lows of the previous two sessions. The benchmark yield had last fallen to this range in mid-May.
Corresponding US Treasury yields eased in Tokyo trading from Friday’s New York close, to last be around 3.73%, near the bottom of the range of the past three weeks.
Japan’s central bank left stimulus unchanged earlier this month, including its yield curve controls (YCC) that tether the 10-year yield within 50 basis points either side of zero.
Minutes of that meeting released on Monday showed one board member calling for an early revision of YCC. However, that view clashes with Governor Kazuo Ueda’s contention that the easy policy continues to be needed.
Japan’s 10-year bond yield falls to one-month low
“There still exists some speculation for a tweak to YCC at the policy meeting in July, but not that much,” said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.
“Ueda has stressed the high uncertainty around the global economic outlook, and it’s hard to imagine such uncertainty would disappear in a month.” The 20-year JGB yield fell 0.5 basis point to 0.960%, while the 40-year yield dropped 1 basis point to 1.365%.
The two-year yield was flat at -0.080%. Five-year and 30-year JGBs had yet to trade as of 0321 GMT.
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