TOKYO Dec 2 Japanese government bonds were
mostly lowers on Friday, pressured by an overnight drop in U.S.
The 10-year JGB yield rose half a basis point (bp) to 0.035
percent, after earlier rising as high as 0.045
percent, which matched a nine-month high notched last week. The
20-year yield added 1 bp to 0.480 percent.
Shorter maturities managed to eke out gains, with the
two-year yield losing 0.5 bp to minus 0.180 percent
while the five-year yield inched 0.5 bp lower to
minus 0.105 percent.
December 10-year JGB futures ended down 0.02 point
On Thursday, U.S. Treasury yields surged, with benchmark
10-year yields touching their highest levels since June 11, 2015
on expectations that gains in oil prices and U.S.
President-elect Donald Trump's policies would fuel higher
The yield on 10-year Treasuries rose as high as
2.4920 percent, and stood at 2.433 percent in Asian trading on
Under its monetary framework outlined in September, the
Bank of Japan controls the JGB yield curve and guides the
benchmark yield to around zero percent.
But this framework of keeping the 10-year yield near zero is
not economically reasonable because this level discourages
lending, former central bank policymaker Sayuri Shirai said on
Friday at a Breakingviews seminar hosted by Reuters.
The BOJ may have to allow 10-year yields to rise to anywhere
from 0.5 percent to 1 percent next year if inflation starts to
pick up, Shirai said.
Japan is preparing to issue more debt-covering bonds due to
a likely shortfall in tax revenues for this fiscal year to
March, the Nikkei business daily reported on Friday.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam)