Japan's 10-year bond yield flattens after tracking U.S. higher

BY Reuters | TREASURY | 09/27/21 04:10 AM EDT

TOKYO, Sept 27 (Reuters) - Japan's benchmark 10-year government bond yield was unchanged on Monday as investors scooped up the securities, which tracked U.S. Treasuries higher earlier in the session.

The 10-year JGB yield was flat at 0.050%, while the 10-year JGB futures barely moved at 151.62, with a trading volume of 20,440 lots.

The 10-year Treasury is at its highest since early July at 1.46% with talk that the reflation trade could be back on as markets brace for the end of super-cheap money.

Yields on longer term Japanese securities gained ahead of an auction of the 40-year notes, with the 40-year JGB yield rising one basis point to 0.760%.

The 20-year JGB yield rose 0.5 basis point to 0.445% and the 30-year JGB yield gained one basis point to 0.680%.

The two-year JGB yield was unchanged at minus 0.130% and the five-year yield was flat at minus 0.095%. (Reporting by Tokyo markets team; Editing by Alexander Smith)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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