10-year JGB Hits 8-Month High 1.56%

Japanese government bond yields rose Thursday, with the key 10-year yield hitting 1.56%, the highest since October, after US Treasury yields rose overnight. On the same day the Nikkei briefly touched the psychologically important 10,000 level. Although the yield on 20-year bonds rose 2 basis points to 2.19% and the 30-year yield rose 2.5 basis points to 2.31%, the shorter end held steady; the 2-year bond yield was 0.37% down by 0.5 basis points and the 5-year bond yield was flat at 0.845%. The 5-year auction whose bid-to-cover ratio was 3.09 times, the highest since January. We see good demand for shorter bonds, less for longer.