TOKYO, Aug 15 (Reuters) - The benchmark 10-year Japanese government bond yield touched a 16-month low on Friday, riding the wave of yield declines in other sovereigns like German Bunds and U.S. Treasuries.
Concerns about the sustainability of economic steps launched by Prime Minister Shinzo Abe also helped nudge JGB yields lower.
“Foreign players appear to be buying JGBs on prospect of ‘Abenomics’ failing after seeing the second quarter GDP slump,” said a trader at a Japanese bank.
A sales tax hike last quarter drove Japan’s economy into its biggest contraction since the March 2011 earthquake and tsunami, showed on Wednesday.
The 10-year JGB yield stood unchanged at 0.500 percent after touching 0.495 percent, lowest since April 2013.
On Thursday U.S. Treasury yields fell on strong demand for 30-year bond supply while disappointing euro zone economic data sent the 10-year Bund yield to record lows. (Reporting by Shinichi Saoshiro and Tokyo markets team; Editing by Kim Coghill)