TOKYO: Japanese government bond (JGB) yields rose on Monday, tracking a surge in US Treasury yields after ratings agency Moody’s downgraded the US government rating. The 10-year JGB yield rose 2.5 basis points to 1.475%.
The two-year JGB yield rose 1 bp to 0.715% and the five-year yield rose 1.5 bps to 0.995%.
“Today’s yields simply mirrored a move of US Treasury yields,” said Naoya Hasegawa, chief bond strategist at Okasan Securities.
The US bond yields rose on Friday, and surged in Asia trade on Monday, which prompted a further sell-off of JGB futures,“ he said.
The 10-year JGB futures fell to 139.22, after opening at 139.37 on Monday.
Futures prices typically move inversely to JGB yields.
US Treasury yields rose on Friday after being down for most of the session, after Moody’s downgraded the US government rating from AAA to AA1, saying the fiscal performance is likely to deteriorate.
In Asia trade on Monday, the yield on 10-year US Treasury bonds rose as much as 8 bps to 4.591%, while the yield on 30-year Treasury notes jumped nearly 10 bps to 5%.
Sentiment is also weighed down by an auction of the 20-year Japanese bonds in the next session, strategists said.
The 20-year JGB yield rose 1 bp to 2.385% and the 30-year JGB yield rose 1 bp to 2.965%. The 40-year JGB yield fell 1 bp to 3.445%.
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