Business & Finance

JGB futures hit 1-year high as euro zone crisis deepens

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In cash bonds, the 10-year JGB yield slipped to a one-year low of 0.940 percent. The five-year yield fell 0.5 basis point to 0.310 percent, marking a two-month low.

December 10-year JGB futures climbed 0.08 point to 143.09 after hitting 143.14, their highest since November 2010.

"JGBs and US Treasuries are drawing flight-to-quality demand from investors who want to park their money temporarily," said a trader at a Japanese bank.

Ministry of Finance data showed foreign investors remained net buyers of Japanese bonds and bills last week for the third consecutive week, attracting safe-haven bids.

Meanwhile, some participants said strains in overseas money markets may be spilling over to the yen market, with three-month euro-yen interest rate futures down 0.5 basis point at 99.665 and the spread between the 2-year swap rate and JGB yields reaching its widest since January.

Ten-year government bond yields in France, Europe's largest economy after Germany, rose to their highest since April. Italian bond yields topped 7 percent.

Copyright Reuters, 2011