SINGAPORE: Japanese government bond yields fell on Friday to their lowest in six weeks, tracking declines in US Treasury yields, as weak US economic data stoked worries of a slowdown and cemented expectations of the Federal Reserve cutting rates soon.
The 10-year JGB yield fell 7 basis points to 0.960%, its lowest since mid-June.
The 20-year JGB yield was 5 basis points lower at 1.740%. Data on Thursday showed further contraction in the US manufacturing sector and a decline in construction spending that solidified a rate cut from the Fed in September.
That along with safe-haven flows into US Treasuries following escalating geopolitical tensions in the Middle East sent the yield on benchmark 10-year Treasuries to a six-month low of 3.943%.
Japan’s 2 year bond yield hits 13-year high as BOJ chief hints chance of another rate hike
Bond yields fall when prices rise. Short-term Japanese government bond yields have been on the rise after the Bank of Japan raised interest rates on Wednesday for only the second time since 2007 and announced a halving of its monthly bond buying.
On Friday, the five-year JGB yield fell 6 basis points to 0.59% but remained close to the 15-year high it touched this week.
The two-year yield fell 2 basis points to 0.43%.
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