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

JAPANESE government bond yields held near three-week lows, anchored down after a wellreceived debt auction took US Treasury yields down across the curve overnight.

The benchmark 10-year JGB yield was unchanged at 0.04 per cent, near a three-week trough of 0.035 per cent 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 0.3 per cent 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 per cent.

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