Yields on shorter-dated Japanese government bonds fell on Friday, supported by overnight declines of U.S. Treasury yields, while those on longer-dated bonds rose amid a lack of demand at the fiscal year-end.
The two-year JGB yield (JP2YTN=JBTC) fell 1 basis point to 0.845% and the five-year yield (JP5YTN=JBTC) fell 1.5 bps to 1.135%.
“The declines in the U.S. Treasury yields underpinned sentiment for the bonds with shorter maturities, but the overall market sentiment is not good,” said Keisuke Tsuruta, a senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
“Demand is limited at the end of the fiscal year, while there is a caution ahead of the Bank of Japan’s policy meeting next week,” he added.
The BOJ is set to keep interest rates steady next week and discuss how much risk the escalating U.S. trade war poses to the export-reliant economy, which will be key to the timing of its next rate hike.
The signs of…
