Tokyo: Japan's 20-year bonds rose the most in 17 months as concern Europe's fiscal crisis is worsening boosted demand for the relative safety of government debt.
Benchmark 10-year yields touched the lowest level since December before Treasury Secretary Timothy F. Geithner visits Germany and the UK this week to discuss the European debt situation. Five-year yields touched levels unseen since 2005 as stocks slid and the Bank of Japan kept interest rates near zero Friday.
The BOJ conducted its third same-day operation this month to boost liquidity and said it would provide one-year loans to banks to encourage lending and defeat deflation.
"As the situation remains unclear about the fiscal crisis, not only domestic investors but also foreign investors are buying Japan's government bonds," said Akio Kato, team leader of Japanese debt at Kokusai Asset Management Co. in Tokyo, which runs the $40 billion (Dh146.8 billion) Global Sovereign Open fund.
The yield on the 2.1 per cent bond due March 2030 fell 8.5 basis points to 2.005 per cent last week in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker.
