10-year JGB futures rise after U.S. Treasury yields retreat

BY Reuters | TREASURY | 06/20/22 04:13 AM EDT

TOKYO, June 20 (Reuters) - Benchmark 10-year JGB futures rose on Monday after U.S. Treasury yields retreated from 10-year highs over the weekend, while the Bank of Japan's ramped-up efforts to defend its 10-year yield ceiling helped calm sentiment.

The 10-year JGB futures rose 0.56 point to 147.99, with a trading volume of 8,760 lots.

U.S. Treasury yields held near the week's lows on Friday after a volatile five days that saw them hit more than 10-year highs on expectations of aggressive rate increases, and then fall on concern about how these would impact growth.

The Bank of Japan on Friday kept its easy-monetary policy unchanged, announcing it would continue its offer to buy unlimited amounts 10-year bonds and the bonds with seven-year maturity.

Yields on cash bonds rose, with the 10-year JGB yield rose 1 basis point to 0.230%.

The five-year yield jumped 4 basis points to 0.085%.

The 20-year JGB yield rose 3 basis points to 0.915% and the 30-year JGB yield rose 3.5 basis points to 1.205%.

The 40-year JGB yield rose 3.5 basis points to 1.290%.

The two-year JGB yield rose 1 basis point to -0.065%. (Reporting by Tokyo markets team; Editing by Robert Birsel)

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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