JGB yields edge down in sympathy with US peers
By Brigid Riley
TOKYO, Nov 26 (Reuters) -Japanese government bond (JGB) yields declined on Tuesday, tracking an overnight fall in U.S. Treasury yields as investors awaited fresh market signals.
The 10-year JGB yield JP10YTN=JBTC was last down 1 basis point (bp) at 1.06%, while 10-year JGB futures 2JGBv1 rose 0.08 points to 142.93 yen.
U.S. Treasury yields declined sharply on Monday as investors expected a more moderate than feared U.S. fiscal trajectory after hedge fund manager Scott Bessent was nominated as U.S. Treasury secretary by President-elect Donald Trump on Friday. US/
But after dropping in morning trade in tandem with U.S. yields, movement has been limited as the JGB market struggled between buying and selling.
JGB yields climbedin recent sessions as the market began to price in a higher chance that the Bank of Japan will increase interest rates in December. The shift was largely spurred by expectations that the yen's decline could pressure the central bank to act.
That upward trend in yields may have peaked out for the time being, said Yurie Suzuki, market analyst at Mizuho Securities.
"If there actually is a rate hike in December, it will be easier to factor in future rate increases, but I think market pricing (for a year-end hike) seems to have paused for now."
The dollar earlier rose after Trump pledged big tariffs on Canada, Mexico and China.
But the yen hadn't moved much from its range. The dollar was last 0.12% lower at 153.99 yen.
"As such, I don't think the impact on yen bond yields is that significant," said Suzuki.
The two-year JGB yield JP2YTN=JBTC, which corresponds more closely to monetary policy expectations, was flat at 0.585%.
The 20-year JGB yield JP20YTN=JBTC fell 1.5 bps to 1.865%, while the 30-year JGB yield JP30YTN=JBTC ticked down 0.5 bp to 2.28%. Both sat just above two-week lows hit earlier in the day.
The five-year yield JP5YTN=JBTC edged down 0.5 bp to 0.73%.
Reporting by Brigid Riley; Editing by Eileen Soreng
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