JGB yields track U.S. long-dated bond yields lower

BY Reuters | TREASURY | 10/14/21 01:47 AM EDT

TOKYO, Oct 14 (Reuters) - Japanese government bond yields fell on Thursday, tracking long-dated U.S. Treasury yields lower, while investors did not react to a weaker demand for a five-year domestic note auction.

The 10-year JGB yield fell 0.5 basis point to 0.080%. The 20-year JGB yield fell 1 basis point to 0.455%.

The government auction for five-year notes drew bids worth 3.86 times the amount sold, lower than a bid-cover-ratio of 4.42 times at the previous auction. Overnight, the yield on 10-year U.S. Treasury notes fell following data on consumer prices that further fanned concerns inflation will continue to climb and force the Federal Reserve to take action.

In Japan, the 30-year JGB yield fell 0.5 basis point to 0.685%, while the 40-year JGB yield fell 1 basis point to 0.755%.

The two-year JGB yield was unchanged at minus 0.120%.

The five-year yield fell 0.5 basis point to minus 0.085%.

Benchmark 10-year JGB futures rose 0.14 point to 151.39, with a trading volume of 19,924 lots. (Reporting by Tokyo markets team; Editing by Krishna Chandra Eluri)

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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