TOKYO Aug 29 Japanese government bond prices
slipped on Friday as participants sold into a recent rally to
take profits, forcing debt yields away from recent troughs.
The benchmark 10-year yield, which hit a 16-month low of
0.485 percent the previous day along with a rally in other
sovereign debt markets like German Bunds and U.S. Treasuries,
rose 1.5 basis points to 0.500 percent.
September 10-year JGB futures shed 0.08 point to
The JGB yield curve steepened a touch, with participants
noting that monthly duration extensions into longer-dated JGBs
by index-following investors were tamer than usual.
Still, JGB yields looked poised to probe fresh lows in the
long term, with geopolitical risks stemming from the Ukraine
conflict flaring up again and driving investor bids for safe
havens such as government debt.
"There really are no factors out there that can prevent the
10-year yield from declining further," said Katsutoshi Inadome,
a fixed income strategist at Mitsubishi UFJ Securities in Tokyo.
There is no comprehensive evidence so far, but it would not
be surprising if foreign investors seek relatively higher
yielding JGBs with short-term Bund yields in negative territory,
The two-year Bund yield has gone below zero and
the 10-year German debt yield has continued to hit
fresh record lows under the ECB's easy policy. The central bank
is expected to ease further to stave off deflation.
(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)