Japan bond yields fall as lower oil prices ease inflation concerns
TLT•Japanese government bond yields fell, with the 10-year yield down 5.5 basis points to 2.755%, as a nearly $9 drop in Brent eased inflation concerns. Yields also declined across other maturities despite a weak 10-year bond auction and BOJ minutes backing continued rate hikes.
1. Yields decline
Japanese government bond yields fell on Thursday, tracking U.S. Treasuries, after lower oil prices eased inflation concerns. The 10-year yield declined 5.5 basis points to 2.755%, following a nearly $9 overnight drop in Brent.
2. Moves across maturities
The 20-year yield fell 2 basis points to 3.64%, while the 30-year yield dropped 6 basis points to 3.865%. The 2-year yield declined 3 basis points to 1.855%, and the 5-year yield fell 5.5 basis points to 2.195%. Traders largely shrugged off a relatively weak 10-year bond auction and minutes from the Bank of Japan’s September meeting that showed policymakers backing continued rate hikes.
3. Uncertain outlook
Mizuho Securities analyst Yuki Yamada said it was unclear whether the war in Iran would de-escalate, making it hard for yields to keep falling steadily. Yamada added that BOJ rate-hike expectations looked set to remain firm for the time being.
