JGB yields edge lower on slowdown jitters
SINGAPORE — Yields on super-long Japanese government bonds (JGBs) inched lower on Thursday as investors braced for a worldwide economic slowdown and bet on a slower pace of interest rate hikes.
The 20-year JGB yield fell 2 basis points to 1.080%, while the 30-year JGB yield fell for a fifth straight session and was down 3 basis points to 1.440%. Yields for both notes were hovering around two-week lows.
The 40-year JGB yield fell 4.5 basis points to 1.670%, its lowest since Nov. 24.
“Bond buying is intensifying against the backdrop of concerns about an economic slowdown and expectations that central banks will not raise interest rates,” said Makoto Suzuki, a senior strategist at Okasan Securities.
On Wednesday, the Bank of Canada hiked its benchmark overnight interest rate by half a percentage point to the highest level in almost 15 years, but joined other policy-setters in signaling its tightening campaign was near an end.
U.S. Treasury yields hovered around three-month lows as investors anticipate U.S. rates are also nearing peaks.
The U.S. central bank is due to meet next week when it is widely expected to increase interest rates by 50 basis points after delivering four consecutive 75-basis points hikes.
The two-year JGB yield was flat at -0.015%, while the five-year yield fell 0.5 basis points to 0.120%.
Benchmark 10-year JGB futures fell 3 yen to 149.12, with a trading volume of 8,361 lots. (Reporting by Ankur Banerjee and Tokyo markets team; Editing by Savio D’Souza)
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