JGB yields track US Treasury peers lower

BY Reuters | TREASURY | 04/18/24 02:44 AM EDT

TOKYO, April 18 (Reuters) - Japanese government bond (JGB) yields fell on Thursday, tracking overnight U.S. Treasury yields lower, with the market shrugging off comments from a Bank of Japan (BOJ) board member.

The 10-year JGB yield fell 2.5 basis points (bps) to 0.86%, slipping from 0.885%, its highest level since Nov. 13.

U.S. Treasury yields dipped on Wednesday, slowing a week-long selloff that had pushed benchmark 10-year Treasury yields to their highest levels since November.

Earlier in the day, BOJ board member Asahi Noguchi, known for his dovish views, said the pace of future interest rate hikes would likely be much slower than that of its global peers in recent tightenings.

"His dovish stance was not fully reflected in his comments today," said chief bond strategist at Mizuho Securities.

The BOJ last month ended its negative rate, setting the overnight call rate as its new policy rate and decided to guide it in a range of 0-0.1%.

The market is betting there will be another rate hike this year, helping the policy-sensitive two-year JGB yield rise to 0.28%, its highest level since November 2009, for a second session.

The two-year bond yield was last down at 0.27%, while the five-year yield fell 2 bps to 0.470%.

The 20-year JGB yield fell 4 bps to 1.625% and the 30-year JGB yield fell 3 bps to 1.910%. (Reporting by Junko Fujita; Editing by Rashmi Aich)

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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