TOKYO: Japanese government bonds (JGBs) fell on Monday, tracking declines in US Treasuries on Friday, as investors awaited market-moving cues such as the Bank of Japan’s (BOJ) decision on its bond tapering.
The five-year JGB yield and the 10-year JGB yield rose four basis points (bps) to 1.005% and 1.44%, respectively.
Yields and prices of bonds move inversely.
The BOJ is expected to announce a slower pace of reductions in its bond purchases from the next fiscal year at the end of a two-day policy meeting on Tuesday.
In addition to the BOJ’s decision, the market awaits a five-year bond auction, as well as a meeting of primary dealers, which would affect demand for JGBs, said Naoya Hasegawa, chief bond strategist at Okasan Securities.
The BOJ is under pressure from JGB investors to slow the pace of its tapering following a surge in yields on super-long-dated bonds.
The market also expects the Ministry of Finance to cut the sale of such bonds after it gauges opinions from bond dealers, strategists said.
“We can say the JGB yields rebounded from their declines last week, after the market saw rises in US Treasury yields,” Hasegawa said.
US Treasury yields rose Friday after Israel’s strike on Iran shocked markets, pushing oil prices higher and pressuring stocks.
The 20-year JGB yield rose 3 bps to 2.375% and the 30-year JGB yield rose 2.5 bps to 2.905%.
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