Tokyo: Japan's 10-year bonds fell, completing a second weekly decline, as Asian stocks joined a rally in global equities, damping demand for the safety of debt.
Benchmark yields climbed to the highest in more than a week as the Nikkei 225 Stock Average completed a fourth week of gains. Bond futures dropped by for a second day after the contracts rolled over from March to June deliveries earlier last week. Declines in bonds were limited after Bank of Japan Governor Masaaki Shirakawa told lawmakers in Tokyo Saturday the central bank will keep interest rates low.
"Yields were pushed higher as futures dropped amid a rally in global stocks," said Satoshi Yamada, manager of fixed-income trading at Okasan Asset Management Company in Tokyo. Futures tend to drop after a contract change over, he said.
Rising yields
The yield on the 1.4 per cent bond due March 2020 rose 3.5 basis points, or 0.035 percentage point, last week to 1.34 per cent at Japan Bond Trading Company, the nation's largest inter-dealer debt broker. The rate earlier touched 1.345 per cent, the highest since February 22. The price dropped 0.311 yen (Dh0.012) to 100.528 yen.
Ten-year bond futures for June delivery dropped 0.47 to 138.85 on the Tokyo Stock Exchange. Futures dropped for three consecutive days the last time contracts rolled over from December to March deliveries.
"Technical trades by speculators were a big driving force behind bond future weakness," said Kazuhiko Sano, chief strategist in Tokyo at Citigroup Global Markets Japan Incorporated, a unit of New York-based Citigroup Incorporated.
