Ten-year JGB yield hits highest in nearly four months, tracks U.S. peers

BY Reuters | TREASURY | 09/28/21 03:58 AM EDT

TOKYO, Sept 28 (Reuters) - Japan's 10-year government bond yield hit its highest in nearly four months, tracking U.S. Treasury yields higher, while weak demand at a 40-year debt auction weighed on bond prices.

The 10-year JGB yield rose two basis points to 0.070%, its highest since June 9. Benchmark 10-year JGB futures fell 0.25 point to 151.37, with a trading volume of 24,885 lots. U.S. Treasury yields hit a three-month high overnight as investors braced for U.S. tapering.

The Federal Reserve said last week it will likely begin reducing its monthly bond purchases as soon as November and signalled interest rate increases may follow more quickly than expected.

Earlier in the day, a 40-year debt sale received bids worth 2.53 times the amount on offer, a weaker bid-cover-ratio than the 2.72 seen at a previous auction of such bonds.

The 20-year JGB yield rose one basis point to 0.460% and the 40-year JGB yield rose 1.5 basis points to 0.775%.

The yield on the 30-year JGBs stood at 0.680%, unchanged from the previous session.

The two-year JGB yield was flat at minus 0.130% and the five-year yield rose one basis point to minus 0.085%.

(Reporting by Tokyo markets team; Editing by Ana Nicolaci da Costa)

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.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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