JGB yields track fall in U.S. Treasuries

BY Reuters | TREASURY | 05/13/22 02:12 AM EDT

TOKYO, May 13 (Reuters) - Japanese government bond (JGB) yields on Friday tracked overnight declines in U.S. Treasury yields as the bond market weighed the odds of the Fed keeping the economy from lurching into recession while looking to tame rising inflation.

The 10-year JGB yield fell 0.5 basis point to 0.240% and the 20-year JGB yield fell 2 basis points to 0.740%.

"Even as inflation remains high, expectations that yields on U.S. and German bonds might have peaked their highs could prompt investors to buy Japanese bonds at their dent," said Katsutoshi Inadome, senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities.

The 30-year JGB yield fell 1 basis point to 0.995%.

The 40-year JGB yield fell 1.5 basis point to 1.110%.

The two-year JGBs were not traded and the yield was flat at -0.055%.

The five-year yield fell 0.5 basis point to 0.005%.

Benchmark 10-year JGB futures rose 0.07 point to 149.54, with a trading volume of 16,283 lots.

(Reporting by Tokyo markets team; Editing by Vinay Dwivedi)

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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