TOKYO: Japan’s 10-year government bond yield fell on Friday as investor demand for the paper rose amid a shortage of supplies, while yields on other tenors hit their multi-month highs.
The 10-year JGB yield fell 1 basis point (bp) to 0.640%. “Investors do not own enough 10-year notes after a series of the Bank of Japan’s (BOJ) emergency bond buyings,” said Kazuhiko Sano, a strategist at Tokai Tokyo Securities.
The BOJ conducted emergency bond burying in the past sessions as the yield jumped to a more than nine-year high of 0.655% in the on Thursday, after the central bank set its de-facto yield ceiling at 1%.
Japan’s 10-year bond yield falls ahead of auction
“So far the BOJ has shown its intention to contain the 10-year bond yield,” Sano added. Yields on super-long maturities tracked US Treasury peers higher overnight, with the 20-year JGB yield rising to 1.355%, its highest since Feb. 1, before retreating to 1.345%, down 3 bps from the previous session.
Overnight US long-term Treasury yields hit nine-month highs after employment and other economic data pointed to easing inflation.
Japan’s 30-year JGB yield touched 1.630%, its highest since Jan. 13, before trading last at 1.625%, up 3.5 bps from the previous session. The 40-year JGB yield rose 4 bps to 1.805%.
The five-year yield rose 0.5 bp to 0.215%, its highest since March 10.
The two-year JGB yield was flat at 0.020%. Benchmark 10-year JGB futures fell 0.02 yen to 146.3, with a trading volume of 14,931 lots.
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