TOKYO: Japanese government bond (JGB) yields rebounded on Monday as investors rolled back some of the bond buying that occurred in anticipation of Friday’s US jobs report.
The 10-year JGB yield was up 4 basis points (bps) at 0.885% as of 0421 GMT, after slipping to its lowest since Aug. 15 on Friday. Benchmark 10-year JGB futures declined 0.41 points to 145.77 yen.
JGBs yields slipped last week as investors eyed a potential drop in US Treasury yields after the release of closely watched US nonfarm payrolls for August.
A weaker-than-expected non-farm payrolls figure for July sparked US recession concerns last month, leading to a drop in equities and bond yields.
Markets have since remained sensitive to labour data as investors seek to gauge the state of the world’s largest economy and size of upcoming interest rate cuts by the Federal Reserve.
But Friday’s data showed a mixed picture. US 10-year Treasury yields initially fell to a 15-month low on Friday before paring back in choppy trading.
Yields have risen higher off that low on Monday in Asian trade to sit around 3.74%.
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“There is certainly softness, but it’s not like the employment situation has worsened to the point that the Fed will suddenly lower rates by 50 basis points” at this point, said Yurie Suzuki, a market analyst at Mizuho Securities.
A portion of Monday’s rise in JGB yields appeared to be a rebound from last week’s declines, while investors also seemed to be adjusting positions ahead of auctions for five- and 20-year JGBs scheduled for later this week, she said.
The 20-year JGB yield rose 3.5 bps to 1.69%.
The 30-year JGB yield also picked up 3.5 bps to sit at 2.045%, after hitting its lowest since Aug. 5 on Friday.
The five-year yield was 2.5 bps higher at 0.52%.
The two-year JGB yield was up 1.5 bps at 0.39%, its highest since Aug. 2.
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