JGB yields hold near 3-week lows after bullish run by Treasuries

31-Dec-2016 Intellasia | Reuters | 6:00 AM Print This Post

Japanese government bond yields held near three-week lows on Friday, anchored down after a well-received debt auction took US Treasury yields down across the curve overnight.

The benchmark 10-year JGB yield was unchanged at 0.040 percent, near a three-week trough of 0.035 percent touched the previous day.

The JGB market also drew support from an ebb in investor risk appetite with Tokyo’s Nikkei retreating to its lowest in three weeks.

The bonds did not make much headway, however, as many investors are seen to have already squared their positions before the year’s end, limiting movements in the market.

The 10-year JGB yield was on track for a decline of about 20 basis points on the year.

The yield fell below zero earlier in the year under the Bank of Japan’s negative interest rates policy, touching a record low of minus 0.300 percent in July amid the turmoil in global markets following Britain’s Brexit vote.

But it has since climbed out of negative territory as the BOJ did not boost its already aggressive bond buying, eventually opting for a yield curve control scheme under which it aims to keep the benchmark yield around zero percent.

JGB yields have also felt the tug from the surge in Treasury yields that took place after the US elections in November.



Category: Japan

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