JGB yields track U.S. Treasury peers higher

BY Reuters | TREASURY | 05/18/22 01:44 AM EDT

TOKYO, May 18 (Reuters) - Japanese government bond (JGB) yields rose on Wednesday, tracking overnight gains in U.S. Treasury yields, as solid U.S. retail sales in April raised hopes of stronger economic growth.

The 10-year JGB yield rose 0.5 basis point to 0.245% and the 20-year JGB yield rose 0.5 basis point to 0.770%.

Treasury yields rose also as Federal Reserve Chairman Jerome Powell said that the U.S. central bank will "keep pushing" to tighten U.S. monetary policy until it is clear that inflation is declining.

The 30-year JGB yield rose 1 basis point to 1.025% and the 40-year JGB yield rose 0.5 basis point to 1.145%.

An outcome of a government auction for five-year notes was also moderately firm, even as it received bids worth 3.40 times the securities sold, lower than a bid-cover ratio of 3.61 times at the previous auction.

"The auction was supported by demand from those who wanted to cover their short-selling," said a market participant at a domestic brokerage.

The five-year yield rose 0.5 basis point to 0.015%.

The two-year JGB yield rose 0.5 basis point to -0.055%.

Benchmark 10-year JGB futures barely moved at 149.48, with a trading volume of 11,871 lots. (Reporting by Tokyo markets team; editing by Uttaresh.V)

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.