May 24, 2018 / 2:29 PM / a month ago

German yields hits 4-1/2 month low after Trump calls off N.Korea summit

LONDON, May 24 (Reuters) - Germany’s 10-year government bond yield dropped to its lowest since early January on Thursday after a planned meeting between the heads of state of United States and North Korea fell through.

U.S. President Donald Trump on Thursday called off a planned summit with North Korean leader Kim Jong Un, even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site.

This sparked a rush towards safe haven assets such as government bonds and the Japanese yen.

The yield on Germany’s 10-year government bond, seen as one of the safest and most liquid investments in the world, dropped 4 basis points to 0.46 percent at one stage, its lowest since Jan. 11, before settling at 0.47 percent.

Most other high grade euro zone government bond yields — which move inversely to price — were down 2-5 basis points on the day.

Earlier, 10-year U.S. Treasury yields hit a session low after the news. (Reporting by Abhinav Ramnarayan; Editing by Saikat Chatterjee)

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