TOKYO: Japanese government bonds fell for the second day on Wednesday, pushing benchmark yields to a one-week high, as rallying equities and weaker Treasuries took away some of the appeal of fixed-income assets.
Treasuries dipped in US trade on Tuesday on persistent talk that Spain may soon ask for a bailout and a German ZEW survey that suggested improving confidence. News that Goldman Sachs reversed a year-earlier loss in the third quarter also lifted risk sentiment.
The Nikkei share average rose 1.5 percent as the yen fell to a one-month low against its major counterparts.
"There's a 20-year auction tomorrow, so domestic supply will be in focus again, but for now, the JGB market is paying attention to external factors again, and tracking the overnight fall in US Treasuries," said a fixed-income fund manager at a Japanese asset management firm.
"Europe's situation appears to be more stable than it was before, but a lot is still unclear, as is the outlook for the US economy," he added.
The benchmark 10-year JGB yield rose 1.5 basis points to 0.770 percent, its highest since Oct. 10.
The 10-year JGB futures contract ended morning trade down 0.13 at 144.15, below its 14-day moving average, now at 144.21. Support was said to lie at its 20-day moving average at 144.11.
The 5-year JGB outperformed after an auction of that maturity on Tuesday met with record-high demand, with its yield gaining half a basis point to 0.195 percent.
On Thursday, the Ministry of Finance will offer 1.2 trillion yen of 20-year JGBs, which was expected to keep selling pressure on superlong maturities.
The 20-year yield and the 30-year yield both added 1.5 basis points to 1.675 percent and 1.930 percent respectively.
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