JGB yields track U.S. Treasury peers lower

BY Reuters | TREASURY | 12/02/22 03:01 AM EST

TOKYO, Dec 2 (Reuters) - Japanese government bond yields fell on Friday, tracking U.S. Treasury yields lower, amid caution ahead of U.S. non-farm payrolls data and next week's domestic auction.

The 20-year JGB yield fell 2 basis points to 1.095%.

The 30-year JGB yield fell 2.5 basis points to 1.490% ahead of an auction for bonds with the same maturity next week.

The 40-year JGB yield fell 2 basis points to 1.755%.

"The market was solid today," said Kazuhiko Sano, a strategist at Tokai Tokyo Securities.

Traders' cautious stance about a possible decision by the Bank of Japan to change its ultra-loose policy took a pause during the session, Sano said.

Speculation that the central bank will alter its yield curve control (YCC) policy, under which the bank maintains low borrowing costs, emerged again since data last week showed core consumer prices in Japan's capital rose at their fastest annual pace in 40 years in November.

The 10-year JGB yield was flat at 0.250%.

The two-year JGBs did not trade and the yield stayed at -0.030%.

The five-year yield rose 0.5 basis point to 0.105%.

Benchmark 10-year JGB futures fell 3 yen to 148.94, with a trading volume of 15,076 lots. (Reporting by Junko Fujita; 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.

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