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Japanese government bond yields fell on Thursday, tracking an overnight decline in US Treasury yields, while investors were less cautious about interest rate hikes amid a stronger yen.
10-year JGB yields fell 2 basis points to 1.050%.
Two-year JGB yields fell 1 bp to 0.58% and five-year yields fell 1.5 bps to 0.720%.
“In addition to the decline in U.S. Treasury yields, the yen’s strength has reduced caution for a rate hike by the Bank of Japan at its December meeting,” said Keisuke Tsuruta, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
US Treasury yields fell on Wednesday as investors poured into US government bonds following weak consumer sentiment surveys in Europe, while US inflation concerns temporarily took a backseat as data came in line with estimates.
The yen has risen sharply in two days, rising above its 200-day moving average at 151.50 per dollar. It was slightly weaker in Asia, down 0.3% at 151.575.
“Overall, the market is still prepared for a BOJ rate hike next month, but the yen’s move boosted sentiment on Thursday,” Tsuruta said.
Overnight index swaps indicated a 56% chance the BOJ will raise rates to 0.5% by 0603 GMT in December, along with a more than 90% chance the central bank will raise rates to 0.75% by October next year.
The 20-year JGB yield fell 2 bps to 1.87%.
30-year JGB yields fell 1 bp to 2.295%.
40-year JGB yield rose 1 bp to 2.66
This article was generated from an automated news agency feed without any modifications to the text.
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