JGB yields track firmer U.S. peers despite BOJ's auction outcome

BY Reuters | TREASURY | 01/11/22 01:00 AM EST

TOKYO, Jan 11 (Reuters) - Japanese government bond (JGB) yields rose on Tuesday, tracking firmer moves on U.S. Treasury yields overnight that helped outweigh relatively strong outcome of the Bank of Japan's bond buying operations.

The 10-year JGB yield rose 1.5 basis points to 0.145% and the 20-year JGB yield rose 0.5 basis point to 0.525%.

The 30-year JGB yield rose 0.5 basis point to 0.715%. The benchmark U.S. 10-year Treasury yield rose to its highest level in almost two years overnight, as investors increasingly expect the Federal Reserve will begin its tightening policy with an interest rate hike as soon as March. Traders digested strong outcome the Bank of Japan's bond buying operations for the debt with maturities with one to three years, while bonds with longer maturities had a moderately solid result, a market participant said.

The 40-year JGB yield was flat at 0.755%.

The two-year JGB yield was flat at minus 0.080%, while the five-year yield rose one basis point to minus 0.035%.

Benchmark 10-year JGB futures fell 0.20 point to 150.77, with a trading volume of 31,904 lots.

(Reporting by Tokyo markets team)

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.