Japan's 10-year bond yield hits 1-month low as BOJ policy shift seen unlikely
Yahoo Finance · 12 May 2.7K Views

TOKYO, May 12 (Reuters) - Japan's 10-year government bond (JGB) yield hit an over one-month low on Friday, underpinned by demand from investors to boost their positions as prospects for the Bank of Japan's policy change weakened.

The 10-year JGB yield fell to as low as 0.360%, its lowest since April 3. It was last flat at 0.385%.

"Right now there are many market participants, particularly insurers, who want to buy JGBs," said Kazuhiko Sano, a strategist at Tokai Tokyo Securities.

"They waited for the BOJ's policy shift in June, but it is seen unlikely as global yields are set to fall amid growing fears for recession in the U.S. and Europe."

Investors worry that the economy will slow and tip into recession in the second half of the year due to higher interest rates and credit tightening, which has worsened as a result of stress on the U.S. regional bank sector.

Yields on longer-dated bonds also fell to multi-week lows, led by demand from insurers, the main buyers for longer durations, but reversed course later in the session.

The 20-year JGB yield fell to as low as 0.960%, its lowest since March 14, before rising to 0.995%, up 1 basis point from the previous session.

The 30-year JGB yield was last up 2 bps to 1.230%, after falling to as low as 1.200%, its lowest since March 30.

The 40-year JGB yield rose 1.5 bps to 1.410%, after hitting 1.365%, its lowest since March 14.

The two-year JGB yield fell 1 bp to -0.060% and the five-year yield fell 0.5 bp to 0.100%.

Benchmark 10-year JGB futures rose 0.09 yen to 148.95.

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