Global Market: Japan bond yields fall as US tech selloff fuels safe-haven demand
Japanese government bond yields fell as a selloff in US technology stocks triggered demand for safer assets. Prime Minister Sanae Takaichi’s pledge to control debt issuance also supported sentiment, while Bank of Japan rate expectations remained i...
By Anupam Nagar, ETMarkets.com |
ETMarkets.com
Japanese bond yields declined as investors sought safety amid technology stock weakness and shifting fiscal concerns.
Japanese government bond (JGB) yields fell on Monday as a risk-off mood swept through financial markets following a selloff in US technology stocks, while Prime Minister Sanae Takaichi's pledge to control government debt issuance provided additional support.
The benchmark 10-year JGB yield declined 3 basis points to 2.9%. Bond yields move inversely to prices.
Read more: Global Market Today: Asian shares fall as AI spending worries weigh on sentiment
US Treasury prices rose on Friday, capping a strong week as investors sought safer assets amid a selloff in artificial intelligence-linked stocks. The weakness in US technology shares raised concerns about a potential spillover into Japanese AI and semiconductor stocks, strengthening demand for government bonds.
Takaichi said on Monday that Japan would appropriately control the size of its debt issuance, a statement that helped support sentiment in the bond market amid concerns over the country's fiscal outlook.
Read more: Rising borrowing costs signal funding risks for global AI expansion: Jefferies report
According to Reuters, the 20-year JGB yield fell 1.5 basis points to 3.790%, while the two-year yield, which is particularly sensitive to expectations for Bank of Japan (BOJ) policy rates, dropped 1.5 basis points to 1.890%. The five-year yield was unchanged, while the 30-year yield held steady. The 40-year JGB yield had yet to trade.
Monetary policy expectations also remained in focus after the BOJ raised interest rates in September and signalled a greater emphasis on tackling inflation.
BOJ Governor Kazuo Ueda said on Monday that underlying inflation was quite close to the central bank's 2% target, reinforcing expectations that policymakers would continue to assess price trends when determining the future path of interest rates.
The movement in Japanese bond yields reflects a balance between global risk aversion, which tends to support demand for government debt, and expectations surrounding domestic monetary policy and the government's borrowing plans.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)
The benchmark 10-year JGB yield declined 3 basis points to 2.9%. Bond yields move inversely to prices.
Read more: Global Market Today: Asian shares fall as AI spending worries weigh on sentiment
US Treasury prices rose on Friday, capping a strong week as investors sought safer assets amid a selloff in artificial intelligence-linked stocks. The weakness in US technology shares raised concerns about a potential spillover into Japanese AI and semiconductor stocks, strengthening demand for government bonds.
Takaichi said on Monday that Japan would appropriately control the size of its debt issuance, a statement that helped support sentiment in the bond market amid concerns over the country's fiscal outlook.
Read more: Rising borrowing costs signal funding risks for global AI expansion: Jefferies report
ADVERTISEMENT
According to Reuters, the 20-year JGB yield fell 1.5 basis points to 3.790%, while the two-year yield, which is particularly sensitive to expectations for Bank of Japan (BOJ) policy rates, dropped 1.5 basis points to 1.890%. The five-year yield was unchanged, while the 30-year yield held steady. The 40-year JGB yield had yet to trade.
Monetary policy expectations also remained in focus after the BOJ raised interest rates in September and signalled a greater emphasis on tackling inflation.
BOJ Governor Kazuo Ueda said on Monday that underlying inflation was quite close to the central bank's 2% target, reinforcing expectations that policymakers would continue to assess price trends when determining the future path of interest rates.
The movement in Japanese bond yields reflects a balance between global risk aversion, which tends to support demand for government debt, and expectations surrounding domestic monetary policy and the government's borrowing plans.
ADVERTISEMENT
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
Related Articles
Global Market: Japan bond yields diverge as investors weigh inflation, BOJ outlookADVERTISEMENT
