JGB yield curve steepens on US Treasury declines, fiscal worries
TLT•Longer-dated JGBs rise after strong auction and pension-fund speculation
- The yield on 20-year JGBs fell 16.5 bps in the previous session following a stronger-than-expected auction for the bonds with the same maturity.
- There was speculation that the Government Pension Investment Fund (GPIF) may have bought some of the bonds to support the auction, as bidders included a significant number of unidentified buyers, which typically include pension funds, Inadome said.
- The JGB market has lifted since last week after Finance Minister Satsuki Katayama said Japan would look into the possibility of changing the asset allocation of the nation's giant state pension funds.
- On Wednesday, the 20-year JGB yield JP20YTN=JBTC rose as much as 4 bps to 3.535%. The 30-year yield JP30YTN=JBTC was up 1.5 bps to 3.750%. The yield on the 40-year JGB JP40YTN=JBTC rose 1 bp to 3.76%.
Japanese yield curve steepens as shorter-dated yields track U.S. declines
TOKYO, July 15 (Reuters) - The Japanese government bond yield curve steepened on Wednesday, as shorter-dated yields tracked overnight declines in U.S. Treasury yields, while longer-dated yields rose amid revived fiscal and inflation worries.
Here are a few details:
- The benchmark 10-year JGB yield JP10YTN=JBTC fell 3 basis points to 2.675%.
- The two-year yield JP2YTN=JBTC inched down 0.5 bp to 1.425%. The five-year yield JP5YTN=JBTC fell 2 bps to 1.930%. Yields move inversely to bond prices.
- U.S. Treasury yields declined on Tuesday after consumer inflation slowed more than expected in June, dampening market expectations for a near-term Federal Reserve rate hike. US/
- "Yields on longer-dated (Japanese) bonds rose because they fell too much in the previous session, and the market revived worries about inflation and fiscal concerns," said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.
