Japanese Government Bond Yields Fall Across Curve on Wednesday
Government bond yields fell on Wednesday, tracking US Treasury yields.
The yield on the 10-year Japanese government bond (JGB) fell 1.5 basis points to 0.215%, while the yield on the 30-year JGB fell 1 basis point to 0.840%.
The fall in JGB yields was supported by a strong outcome of an auction in the previous session.
The Ministry of Finance sold 2.3 trillion yen ($21.1 billion) of 10-year JGBs at a yield of 0.215%, the lowest level since February.
- Investor demand for the bonds was strong, with the bid-to-cover ratio coming in at 4.49 times.
- This suggests that there is still strong demand for safe haven assets, such as JGBs.
The fall in JGB yields also reflected a decline in US Treasury yields.
The yield on the 10-year US Treasury note fell 3 basis points to 2.78%, while the yield on the 30-year US Treasury bond fell 2.5 basis points to 3.41%.
The decline in US Treasury yields was driven by a number of factors, including expectations of slower economic growth and a dovish tone from the Federal Reserve.
The fall in JGB yields is likely to continue in the near term.
A number of factors are likely to support lower yields, including:
- The Bank of Japan's ultra-loose monetary policy
- Expectations of slower economic growth in Japan
- Strong demand for safe haven assets
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