TOKYO: Japan’s benchmark 10-year government bond yield edged up on Friday, as a strong rally of domestic equities prompted investors to sell safe-haven assets.
The 10-year JGB yield rose 1 basis point (bp) to 0.735%.
“The Nikkei index’s rally turned investors to take risks, which prompted them to sell safe-haven assets of bonds,” Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management, said.
“The economic outlook seems good based on the performance of stocks.”
Japan’s benchmark Nikkei hit a fresh 34-year high on Friday, charging toward an all-time peak reached during the heyday of the nation’s bubble economy in the 1980s.
Investors brushed aside economic data released in the previous session which showed the economy had unexpectedly slipped into a recession at the end of last year.
Gross domestic product (GDP) fell an annualised 0.4% in the October-December period after a 3.3% slump in the previous quarter, government data showed on Thursday.
JGB yields edge up ahead of U.S. CPI data for rate clues
“That data does not seem to reflect the real economy, given robust corporate investments and other positive factors we are seeing,” Inadome said.
The two-year JGB yield rose 0.5 bp to 0.140% and the five-year yield rose 2 bps to 0.350%.
Still, yields on longer-dated bonds fell after firm outcome of the finance ministry’s liquidity enhancement auction for bonds with maturities between over 15.5 years and below 39 years.
The 20-year JGB yield fell 1 bps to 1.510% and the 30-year JGB yield fell 1.5 bps to 1.785%.
The 40-year JGB yield rose 2 bps to 2.050%.
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